Joel 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 agency.
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 let's see if I've 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; it's 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: "It's 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, Klein's obscene consumer-guidelines proposal to an ABA audience of fellow attorneys finally makes some sense. You see, they didn't hiss and boo when Klein suggested that consumers be regulated in their own interest. They smiled and applauded.
Joel Klein's 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 1990's, 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?
July 24, 2000
D. T. Armentano is author of Antitrust: The Case for Repeal (Mises Institute, 1999) and Antitrust and Monopoly (Independent Institute, 1990).
