The Myth of Anti-Trust
In a continuing war against monopolies, U.S. anti-trust regulators are zeroing in on graphics chip makers. Last week the Department of Justice issued a subpoena to Santa-Clara based Nvidia, widening a recent probe beyond an earlier target, Advanced Micro Devices.
The monopoly-busters are active in
In effect, anti-trust regulators argue that market success threatens customers and rivals.
Of the panoply of laws an regulations, anti-trust laws rank among the most egregious. The only monopolies that are effective for any length of time are those government monopolies enforced at gunpoint, such as the Postal Service monopoly on delivering First-Class mail. Without a gun, monopolies don't survive the marketplace.
It’s a rare business that wouldn’t like to have a monopoly, of course. I would. But a free-market insures that competition would always arise to exploit and demolish any monopoly…provided the government didn’t step in and protect it.
The literature proving the absurdity of anti-trust laws is vast, so I won’t try to defend the position here (D. T. Armentano’s 1972 classic, The Myths of Anti-Trust is a place to start). What bothers me more than the existence of anti-trust laws is the failure of those attacked by them to stand on principle.
Microsoft is a case in point. Bill Gates, one of the richest, most successful individuals in history, could have argued against the anti-trust actions against Microsoft on principle, but instead he never raised a word in favor of a free market. Nicholas Provenzo, Chairman of the Center for the Advancement of Capitalism, did a better job than I could in articulating Gates’ failure in this regard. I quote from his trenchant essay:
Thus the silence of Microsoft’s leaders on the evils of the antitrust laws—a deliberate silence, for they must live with the choking fallout of these laws every day—is nothing less than an act of sanction. Let us not forget, the firm’s tacit support for the antitrust laws has already cost Microsoft billions of dollars in fines and settlement fees. At what point does one simply stop and say, “enough is enough”?
Many will argue that Microsoft had no choice—that the regulators have too much power and thus cannot be resisted. I hold this argument to be false, for it undersells the power of dissent. A dissenter speaking in defense of truth won’t necessarily win outright, but he can begin to change the terms of the debate. He can check excesses, and over time, he can build a movement that will win him his ultimate victory. As long as Microsoft is a market leader, the company will be a target for looters acting under the guise of antitrust. As long as regulators and Microsoft’s competitors have license to file antitrust suits, there will be no light at the end of the tunnel for the firm—or any other successful firm. Effectively defeating antitrust must be a long-term priority for Microsoft (and other firms with the sense to protect their own self-interest), for no company that is consistently denied the ability to improve its products can long last.
In defense of its virtues, in exasperation of being cut down and cut down again, Microsoft should simply declare that it seeks the abolition of antitrust, and refuse to rest until these laws are repealed—or risk fading into obscurity. If Microsoft takes this righteous stand, it will be known for both leading the PC revolution, and for leading a far greater revolution in American business.
Well said.
Dear John,
The greatest monopoly on earth is government its self. The greatest controlled commodity on the planet are the forced citizen's of these governments.
We are no more than chattel property of the state, whether we wish to think ourselves in a free society or not. Consider the USA, just think of the term "Human Resource Development". Is there a difference between you and me and the cattle of the field, the timber on the land of the minerals under it? I think not! We are just one more commodity to be controlled and used at the discretion of the state. We are so far from the founding fathers concept of "The Sovereign Individual", that it makes my spirit weep.
Why, if I am a free and sovereign individual, do I need the permission of my government to travel to and from my native country? If fact, why, if I am free and "Sovereign" individual, do I have to give my allegiance to any Nation/State? Yes, government is by far the most pervasive and controlling monopoly on the face of the planet. There is no escape, we are all property of and controlled by some Nation/State. I wish it were not so but wished don't get far on this controlled planet. Maybe when humankind grows up at little, over the next thousand years or so, we can get beyond the draconian/monopolistic control of governments as a whole.
Edward A. Mennig, A Sovereign at heart!!
Posted by: Edward A. Mennig | December 07, 2006 at 10:34 PM
Dear John,
The greatest monopoly on earth is government its self. The greatest controlled commodity on the planet are the forced citizen's of these governments.
We are no more than chattel property of the state, whether we wish to think ourselves in a free society or not. Consider the USA, just think of the term "Human Resource Development". Is there a difference between you and me and the cattle of the field, the timber on the land of the minerals under it? I think not! We are just one more commodity to be controlled and used at the discretion of the state. We are so far from the founding fathers concept of "The Sovereign Individual", that it makes my spirit weep.
Why, if I am a free and sovereign individual, do I need the permission of my government to travel to and from my native country? If fact, why, if I am free and "Sovereign" individual, do I have to give my allegiance to any Nation/State? Yes, government is by far the most pervasive and controlling monopoly on the face of the planet. There is no escape, we are all property of and controlled by some Nation/State. I wish it were not so but wished don't get far on this controlled planet. Maybe when humankind grows up at little, over the next thousand years or so, we can get beyond the draconian/monopolistic control of governments as a whole.
Edward A. Mennig, A Sovereign at heart!!
Posted by: Edward A. Mennig | December 07, 2006 at 10:37 PM