D. T. Armentano
Klein is really full of himself these days. The first-round Microsoft
slayer and ex-Clinton White House lawyer recently told a London
gathering of the American Bar Association (ABA) that antitrust was
the only legitimate form of government intervention. He also praised
the European Union for its help in scuttling the WorldCom-Sprint
merger and he called for the creation of a global antitrust enforcement
His most controversial remarks concerned the antitrust regulation
of buying cooperatives on the Web. Consumers and businesses have
been creating internet sites that allow the purchase of large quantities
of products at low prices. Klein, it seems, is worried that such
concentrated buying activity could somehow harm the public interest
and that the trustbusters might need to publish "guidelines"
in this area for both consumers and businesses.
Now letís see if Iíve got this straight. According to Klein, antitrust
is a legitimate government intervention because it protects consumers
from monopolies that can RAISE prices. And the monopoly problem
is so pervasive that an international authority would be useful,
much like Nafta. But if consumers (buyers) form organizations to
purchase in large enough quantities to drive prices DOWN, then that,
too, is a problem that requires antitrust regulation. Huh??
Robert Bork has long argued that the only legitimate mission of
antitrust is to protect poor dumb consumers from greedy monopolists
that would overcharge them. This has always been a debatable proposition
at best. But now Klein comes along and says that consumers who cooperate
and bargain effectively for lower prices also need some antitrust
regulation (to protect them from themselves, apparently). This proposition
is more than debatable; itís down right screwy. Why would consumers
need the government to regulate a process that creates lower prices
for these very same consumers? And if consumer welfare is the alleged
goal of antitrust, why would government want to inhibit the process?
The answer, of course, is: "Itís the power, stupid." Antitrust
is not now nor has it ever been about the public interest or "consumer
protection," as a reading of the classic antitrust cases would
quickly reveal. No, antitrust, plain and simple, has always been
a shakedown racket designed to extort wealth from efficient companies
and consumers and redistribute it to less efficient competitors
and the attorneys that represent them in court. With that in mind,
Kleinís obscene consumer-guidelines proposal to an ABA audience
of fellow attorneys finally makes some sense. You see, they didnít
hiss and boo when Klein suggested that consumers be regulated in
their own interest. They smiled and applauded.
Joel Kleinís meritless assault on Microsoft and his latest threat
to attack internet consumer cooperatives is further evidence that
antitrust is wildly out of control. This was not supposed to happen.
Back in the 1990ís, antitrust reformers gave assurances that antitrust
policy had been "fixed" and that truly stupid cases would
never happen again. But it is the reform movement itself that is
"stupid" and terribly naive, as events have clearly revealed.
If the core problem is political power and special interest, then
the only practical solution to antitrust regulation is to drive
a stake through its heart and repeal the entire system, root and
branch. Are you listening, Governor Bush?
T. Armentano is author of Antitrust:
The Case for Repeal (Mises Institute, 1999) and Antitrust
and Monopoly (Independent Institute, 1990).