Monday, August 4, 2014

Norquist/McAuliffe Fall Short on Antitrust

Grover Norquist, president of Americans for Tax Reform, and Katie McAuliffe, executive director of Digital Liberty, penned an op-ed in the New Jersey Star-Ledger blasting the antitrust attack on the Comcast/Time-Warner merger:

Histrionic warnings of a cable monopoly have all the credibility of Chicken Little.
When the Sherman Antitrust Act passed in 1890, its advocates promised a classically conservative use of law to keep markets competitive and free. But today, federal antitrust law distorts the market, exacts concessions under penalty of law, and has become a forum for rent-seeking by competitors, who hope to leverage government intervention when they cannot win in the marketplace.

Norquist and McAuliffe demolish the notion that the merger will lead to “monopoly,” pointing out the myriad choices consumers have in the video/communications market. They make a compelling practical case for why the merger should not be blocked by antitrust regulators.

Unfortunately, they stop short of condemning antitrust laws as such:

Antitrust laws should not be manipulated as a pretext to justify more central control and command of the economy by government bureaucrats. If critics can’t show in clear and demonstrable terms how consumers are harmed, then Congress and the administration should let companies do what is best for their customers and subscribers, including combine and merge.

How can a set of laws as non-objective as antitrust ever not be "a pretext to justify more central control and command of the economy?" Never, because antitrust itself is based in broader principles that can only lead to more command and control.

Norquist and McAuliffe accept the altruist/collectivist/statist justification for antitrust; that producers exist to self-sacrificially serve consumers, and the state has a duty to enforce that servitude. As such, they do not call for full repeal of antitrust laws, which consistent pro-free marketeers must do if they are to reverse the anti-capitalist trend in this country.

Even those conservatives who do call for full repeal of antitrust cling to self-defeating collectivist justifications. For example, Steve Forbes called for full repeal, but only because “Antitrust efforts serve no public good,” undercutting his whole case and leaving the moral high ground to anti-capitalists. What’s to stop any statist from finding a “public good” that antitrust produces? The term “public good” can’t even be rationally, objectively defined.

Antitrust should be abolished. But conservatives will never beat back antitrust statism—indeed, as Norquist and McAuliffe point out, antitrust is “a classically conservative use of law to keep markets competitive and free”—as long as they cling to altruism/collectivism ethics. Only egoism/individualism can lead to victory over antitrust tyranny.

I left these comments, focusing on the monopoly myth:

The antitrust laws were created in part on a myth; that free markets lead to monopolies. In fact, monopoly is impossible under free markets, because in a free market government is as neutral concerning business as it is concerning religion. Even if a company in a particular market were to achieve a dominant position, it is not a monopoly as long as it is market-driven; i.e., driven by voluntary choices of consumers and no competitors are legally barred from entering the market. Religiously, America is a dominant Christian nation, encompassing 80% of the population. Yet nobody fears a Christian monopoly. Why? Even if the Comcast-Time-Warner merger resulted in an 80% market share, it would not be a problem if consumers could readily choose from competitors freely operating on a level legal playing field.

The key is a level legal playing field. Only government intervention can create monopolies (e.g., cable franchise monopolies dictated by local governments). If you want to see what a monopoly looks like, consider K-12 education. The public schools collect their revenues by government force (taxation) and their "customers" by government force (truancy laws). Government has regulatory control over what minimal private alternatives exist. And if parents should choose a private school or homeschooling, they must still pay taxes to support the government schools, putting private schools at a severe competitive disadvantage (Imagine if Comcast were able to force its fees on everyone, even those who choose alternatives). The government dictates teaching methods, educational philosophy, and teacher credentialing. Everyone must pay, whether they agree with the ideas being taught or not (Imagine if you were forced to tithe the Catholic Church, even if you disagreed with their philosophy). Real competition against the government schools is legally barred, unless you consider parents paying double for choosing a private school from among a minimal range of choices "competition".

Those who scream monopoly against successful private companies while ignoring and even supporting the government school monopoly have no idea what they're talking about. If they were truly worried about monopoly, they'd want to apply the same free market principles operating in the video-communications market to the education market. Imagine what the same kind of competition could do for K-12 education; the robust innovation, rising quality, and falling prices. Imagine the same moral principles that govern a free market—the rights of producers and consumers to contract voluntarily to mutual advantage—being applied to education; people directing the course of their own children's education with their own money, and profit-seeking educators competing freely for the parents' business, as a matter of fundamental right.

It's a tragic shame that so many Americans can get so up in arms over the hint of "monopoly" when it comes to watching TV, while ignoring the monopoly issue when it comes to something as important as educating children.

Related Reading:

My published letter-to-the-editor: Google not a Monopoly

1 comment:

Mike Kevitt said...

If some outfit called Educational Solutions, Inc. was carefully protected by the gvt. instead of the gvt. directly running gvt. schools like it does, THEN maybe the people would see it as a monopoly and complain.