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Antitrust: A Political Weapon

by Llewellyn H. Rockwell, Jr.

Some old-time conservatives had a soft spot for antitrust laws. Russell Kirk, for example, generally believed in free markets, but he made an exception for interventions that curb the activities of corporations. In this, he is joined today by free-market economists of the Chicago School. They are critical of the way antitrust laws have been applied, but stop short of favoring their repeal.

Yet it has never been clearer that antitrust is exactly what the libertarians and Austrian School economists have always claimed: a political weapon that accomplishes no social good and imposes much social harm. Exhibit A is, of course, the absurd Microsoft case, in which the government is attacking a wonderful company on technical issues now two years out of date.

Strip away the jargon, and it becomes clear that the government wants to nationalize Windows, the operating system that has brought the miracles of online commerce, research, and entertainment to the world. When the government ran the internet, it was a dead system of transfer messages between government offices. Microsoft has shown what private enterprise can do: change the world for the better.

It was a revolting display to see the bureaucrats at the Justice Department cheer Judge Jackson’s decision. Many of these people didn’t even know how to navigate the web twelve months ago, and now they are making decisions for millions of consumers and threatening to smash the company that democratized information. The government, driven by power-lust and fueled by the envy of Microsoft’s competitors, is happy to jam a crowbar into the wheel of commerce.

Just as revealing, however, is another antitrust case that has been ignored. The same state officials who have caused so many headaches for the tobacco industry and the software industry are considering a frontal assault on the gun industry. The twist is that the newest issue isn’t liability for violence inflicted (but not prevented) by guns. States are now seeking to prove that the gun industry itself is a cartel that needs to be broken up.

Now, a cartel is supposed to be a group of manufacturers who work in concert to dictate prices. No such thing can exist on a free market, since there are no state-created barriers to entry, the temptation to compete by cutting prices is so strong, the available options are so plentiful, and the market is so internationalized as to make any claims of market power spurious on their face. Even Opec would not have its current level of influence if taxes and production and distribution regulations were repealed, land use not restricted, and free trade unhampered.

There is no such thing as an effective, dangerous cartel on the free market. And there is no such thing as a gun cartel now. A free market in firearms prevails in all aspects of the industry where government doesn’t outlaw it. Visit a gun store or a Wal-Mart and you find an amazing array of styles, prices, and manufacturers, and they are all competing with each other. Consumers are in the driver’s seat as they weigh all the factors that go into a firearm purchase.

How can gun manufacturers be accused of violating antitrust rules? Liberal political elites have noticed that they are all united in opposition to increased government regulation of their industry, exactly as they should be. Recently this took the form of an awe-inspiring boycott of Smith & Wesson for having struck a deal with the government over issues of trigger locks, unapproved retail outlets, and sales of firearms at gun shows.

All over the country, dealers are dropping the gun maker from their inventory, and consumers are boycotting stores that refuse to drop the line. Shooting ranges have even refused to admit the company’s representatives. The boycott has been devastating to Smith & Wesson, threatening the company’ s future profits and tarnishing its name in the eyes of every lover of freedom.

Citing the effectiveness of the boycott, some state attorneys general are claiming that this alone is proof of cartel-like behavior-because the industry is nearly united in opposition to being plundered. This is the equivalent of suing taxpayers as a cartel because they all hate new taxes. And what about the NAACP boycotting South Carolina for its Confederate flag? Are blacks to be called a cartel because so many share a certain political point of view?

And what about the near-universal boycott by college campuses of products from countries alleged to tolerate child labor (that is, allow life-enhancing jobs for children who would otherwise starve)? There is no Justice Department antitrust suit looking into left-wing state universities as possible violators of antitrust laws. And what about the systematic (but completely failed) attempt to boycott Microsoft, as seen at the Boycott Microsoft website. Why isn’t this group of conspirators hounded out of public life?

The reason is that antitrust is applied selectively to those industries and firms deemed to be threats to the Clinton regime. As with all economic regulation, it is passed and used by political interests to effect a certain political result.

What the uproar actually indicates is widespread opposition from gun makers and gun buyers-the only people whose interests should be considered in this issue-to any increase in government involvement in their industry. Gun locks and sales at gun shows are important issues, but they symbolize the idea of gun control generally. Gun owners are intensely aware of what the left is really demanding: federal registration of handguns (favored by Gore) and the eventual rounding up of anyone possessing guns for anything but government-supervised purposes.

Now, you might make the case that S&W was only acting in its own self interest. The company has seen what happened to cigarettes and to Microsoft, and by making a deal with the devil, it was only trying to head off a worse fate. However, if that was the strategy, it hasn’t worked, since several states have already said they will go ahead and include the company in the developing class-action liability suit.

In any case, gun makers and owners are doing liberty a favor by making sure that S&W’s concessions do not pay off either politically or financially. They are certainly within their rights to do so, just as the NAACP is within its rights to avoid doing business in South Carolina, and Linux fans are free to shun Microsoft. In a free society, people are free to buy or not to buy, to promote or boycott a product. The boycott of S&W is a sign that freedom of association is thriving.

And consider the bitter irony of an accusation that gun interests constitute a cartel for going after S&W. One minute, people buying S&W firearms are considered public enemies and guilty of spreading violence and mayhem. In a flash, the rationale is changed, so that people who do NOT buy S&W firearms are considered a dangerous cartel refusing to grant the company its just share of profits in the firearms market. You are part of a militia conspiracy if you buy or part of an evil cartel if you don’t buy.

The old conservative romantics who imagined antitrust could be used impartially were naive. Anytime you permit the central state to attack free enterprise and private property, you are permitting political power to be used against political enemies. And those whom the state regards as political enemies are a predictable bunch: those who oppose government’s desire to take away freedom. That’s why all lovers of freedom should support any industry attacked by antitrust.

Even if you support S&W then, you should also support the other gun makers for standing up for the right to boycott and the right of business to manage its own affairs without arbitrary dictates from the central state. You should support Microsoft as it fights back against an unjust attack.

April 6, 2000

Llewellyn H. Rockwell, Jr., is president of the Ludwig von Mises Institute in Auburn, Alabama. He also edits a daily news site, LewRockwell.com.

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