Antitrust: The Case for Repeal

by Dominick T. Armentano

This 100-page tour de force rips the intellectual cover off antitrust regulation to reveal it for what it is: a bludgeon used by businesses against their competitors. Unlike some critics, Professor Armentano carries the logic of his analysis to fullest possible length:

"My position on antitrust has never been ambiguous," he writes. "All of the antitrust laws and all of the enforcement agency authority should be summarily repealed. The antitrust apparatus cannot be reformed; it must be abolished."

Professor Armentano begins with the most rigorous and revealing account of the Microsoft antitrust battle to appear in print. He further discusses other recent cases, including Toys "R" Us, Staples, and Intel, as well as many historical cases. He covers nearly every conceivable rationale for antitrust, including price fixing, tie ins, vertical and horizontal mergers, and many more.

This is a crucially important work in our new era of antitrust enforcement. This 2nd edition is newly revised (1999) and includes a new treatment of Murray Rothbard's contributions to the theory of monopoly and competition.

This is the only book on antitrust and the Microsoft case that calls for the repeal of all antitrust.

To search for Mises Institute titles, enter a keyword and LvMI (short for Ludwig von Mises Institute); e.g., Depression LvMI

Genres: Economics, Politics, Business, Nonfiction, Law, History

128 pages, Kindle Edition

First published May 1, 1986

Reviews

[Pedro Almeida Jorge · Rating 5 out of 5]

This is not a groundbreaking treatise. However, it does not pretend to be so.
With that in mind, in my opinion, it has everything to be considered 5/5 stars, given the goal i believe the author was trying to accomplish: to present the case against antitrust legislation, while introducing the reader to the subject.
It is short and provocative, it is direct yet full of content, it is extremely well-referenced in case you want to explore deeper into the topic, and it combines theoretical discussion with a variety of historical cases. And it certainly does not avoid subtle topics. Economics as it should be performed. Ludwig von Mises would certainly be proud of this follower of his methods.
From now on, this will be at the top of my recommendations for newcomers into the "Austrian" school, although this could certainly be enjoyed by any other critical-minded economist.

pdf available for free at:
https://mises.org/library/antitrust-c...

[Joshua · Rating 4 out of 5]

This book is a provocative and persuasive treatise on antitrust law and its tremulous empirical/theoretical bases. As one of the loudest voices against the arbitrary and inefficient antitrust system, Armentano expertly dismantles each mainstream argument for antitrust enforcement.

[ziombel · Rating 4 out of 5]

It's a short work of Austrian economist about antitrust policy. The author criticizes the fight against all forms of monopolies.

Dominick describes the needed conditions to form a monopoly or cartel in the free market. Even if the free market would create a monopoly or cartel (which is very unlikely), it is required to be more effective than potential competitors to maintain such monopoly. Each cartel which will be created and will not effectively satisfy the needs of consumers quickly fall, because each of the cartel members and new potential competitors could greatly increase its profits by breaking such a cartel.

The author discusses other issues, such as taking over the market by mergers, horizontal and vertical agreements, price-fixing, marketing and disposes of the argument concerning the barriers to entry on the free market. For each of the problems the author gives examples of court cases regarding, inter alia, Microsoft, IBM, Standard Oil, etc.

A huge problem in theories of supporters of the fight against monopolies is that they are based on classical and erroneous theories about static economy and models of excellent competition. A huge problem is also to assess whether a company is a monopoly or not. Monopolies and cartels can be created only by creating insurmountable entry barriers by the State (producing concessions and many regulations). Antitrust laws contribute to the creation of cartels, because they punish entrepreneurs for efficiency. The fight against "monopolies" in the free market means fighting with innovations. Actually, any reduction of the price by the company (eg. An attempt to break out of the cartel) will be treated as dumping and attempt to monopolize the market. According to the author the vast majority of antitrust cases to companies were dragged by their less efficient competitors.

According to me it is a good work expounding the statists arguments in favor of antitrust laws. The only effective method in the fight against monopolies is to reduce the competence of the state, because they create monopolies by creating impassable entry barriers and destroying efficient competitors. I recommend this work to anyone.

//polish
Jest to krótka praca austriackiego ekonomisty o polityce antymonopolowej. Autor krytykuje wszelkie formy walki państwa z monopolami.

Dominick opisuje warunki które musiałyby wystąpić, aby monopol lub kartel mógł powstać na wolnym rynku. Nawet jeśli na wolnym rynku stworzyłby się monopol lub kartel(co jest bardzo mało prawdopodobne), to utrzymanie takiego monopolu wymagało by od monopolisty większej efektywności od jego potencjalnych konkurentów. Każdy kartel który powstanie i nie będzie efektywnie zaspokajał potrzeb konsumentów, szybko upadnie, ponieważ każdy z członków kartelu oraz nowi potencjalni konkurenci mogą zwiększyć swój zysk łamiąc taki właśnie kartel.

Autor porusza także inne kwestie, jak przejmowanie rynku przez fuzje, porozumienia poziome i pionowe, zmowy cenowe, marketing oraz rozprawia się z argumentem dotyczącym barier wejścia na wolnym rynku. Do każdego z problemów autor podaje przykładowe sprawy sądowe, dotyczące między innymi Microsoftu, IBM, Standard Oil itp.

Olbrzymim problemem w teoriach zwolenników walki z monopolami jest opieranie się na klasycznych i błędnych teoriach o statycznej gospodarce i doskonałych modelach konkurencji. Olbrzymim problemem jest też ocenienie, czy dana firma jest już monopolem czy jeszcze nie. Monopole i kartele mogą powstać tylko dzięki tworzeniu nieprzekraczalnych barier wejścia przez państwo(tworząc koncesje oraz masę regulacji). Ustawy antymonopolowe przyczyniają się do tworzenia karteli, ponieważ kara się przedsiębiorców za efektywność. Walka z "monopolami" na wolnym rynku oznacza walkę z innowacjami. Tak właściwie każde obniżenie ceny przez firmę(np. próba wyrwania się z kartelu) zostanie potraktowana jako dumping i próbę zmonopolizowania rynku. Według danych autora zdecydowana większość spraw antymonopolowych była wytaczana firmom przez ich mniej wydajnych konkurentów.

Według mnie jest to dobra praca rozprawiająca się z etatystycznymi argumentami za ustawami antymonopolowymi. Jedyną skuteczną metodą w walce z monopolami jest ograniczanie kompetencji państwa, ponieważ to ono tworzy monopole tworząc nieprzekraczalne bariery wejścia oraz niszcząc wydajnych konkurentów. Polecam to dzieło każdemu.

[Igor · Rating 3 out of 5]

Thought that monopoly busting was a legitimate use of government until I learned the history of it. Now, any corporation vaguely targeted as a monopoly has no options; raise prices, and its gouging, keep prices the same, and its collusion, lower prices, and its predatory. While in theory, monopolies are detrimental to a healthy market system, which is characterized by consumer choice and competition, in practice, I think there is scant evidence of true monopoly abuses throughout our history, but it is replete with government interventions under the guise of antitrust.

[Markus · Rating 4 out of 5]

This book is about the history and rationalization for government’s managing of the economy through laws and antitrust legislation. I was already biased against any government interference into any aspect of people’s lives but I didn’t know how ridiculous it really was. For example there is legislation among the antitrust laws, for example Clayton Act and the Robinson-Patman Act in the US whose explicit intent is to restrict price rivalry between companies. Firms that are sued on the basis of these acts will always have to raise their prices by law. The purported intent is to protect the “competition” of the market so that companies with higher prices of the same product will not be forced out. This is quite silly and backwards and a usual example of manipulative use of language by the government. What they are really doing is caving in to special interest lobbyists that leverage the government into keeping their inefficient companies in business. Again, while the government is claiming to protect the market and the consumers, it is really just protecting corrupt businesses, who are unable to compete in the free market without government’s protective laws.

These laws that the government uses to manage the economy are based on some whacky ideas of what perfect competition in the free market is supposed to be like. Supposedly the ideal is some static equilibrium, where people’s preferences don’t change or hardly exist at all and where the endless amounts of unknown information about people’s preferences is just assumed to be some x value by government bureaucrats. So they have built a silly little model that they base their laws on and force the real-world economy to contort itself into this model by enacting their laws. People’s property rights and freedoms are, of course, a collateral casualty that is justified to preserve “social welfare”. The effect has, of course, been the opposite as an endless amount of companies attempting to increase efficiency and decrease their prices have been prevented by government regulations.

But what about evil free market monopolies? After all, when the free market is allowed to thrive without limitations, evil things like big corporations and billionaires come into existence, right? Right?!!??! This appears to be the main argument in favor of government restrictions of businesses and according to them, in unrestricted free market a corporation that would achieve dominance would lower its prices to force competitors out and once they are all out, would increase its prices drastically since it now has full dominance over the market. This would be called predatory pricing. In fact there is no documented instance in history where this has actually happened. Also if you think about it for two seconds, this scenario would logically not be able to take place. If theoretically a dominant company would be able to force out all its competitors by lowering prices and then were to raise its prices significantly, this would create massive incentive for companies to re-enter the market, which they would most definitely do. Take into account that any firm forced out of business will leave its manufacturing facilities behind, which can be bought out cheaply by new investors to re-vitalize the business. The point being that monopolies in the free-market, like the government wants you to believe are very likely, are actually impossible.

A whole other thing is monopolies in the free market protected by laws, though. This must be emphasized as it is probably the most common point where people mistake government monopolies for free market monopolies. To be sure, a firm that lobbies the government to act laws that will keep competitors out of the market have and will exist and this is definitely a real monopoly but this has nothing to do with the free market. The point being that the only way actual monopolies can come into existence is through government interference. Also a firm in the free market that has 100% of the market share is still not a monopoly since people freely choose its product over other products and competitors are not forced out of the market through laws. In other words market share is not an indicator of whether a company is monopolistic or not. Furthermore, even price coordination and cooperation between businesses in the free market is not a reason for government interference since these can reduce price fluctuations and reduce costs that would result in lower prices, thus all antitrust legislation should be ended at once.

[Mike · Rating 5 out of 5]

A masterclass in antitrust--and only 130 pages. Highly recommend. Works especially well for undergrads familiar with the Neoclassical models introduced in intermediate micro- and macro. The lay economist can still broach this book, however, with careful reading and some amount of research. Highly recommend.

[Simon · Rating 5 out of 5]

Really enjoyed the thorough introduction and incorporation of some empirical evidences/specific case studies alongside heterodox antitrust theory. A lot of content covered in few pages. Great stuff.

[Bill Peacock · Rating 5 out of 5]

One of the few must-read books if you really want to understand economics. One thing you'll learn is that the only harmful monopoly is one legally-created and enforced by the government, e.g., The East India Company, the Stamp Act, etc. Otherwise, real monopolies are pretty much non-existent, and even if they do happen to come into existence, they only do so through the voluntary actions of consumers in market place who wanted the product--which obviously met the consumers' wants better than any other product on the market. So everyone is better off.

[Chris · Rating 2 out of 5]

Not terribly convincing.

[Bobby · Rating 3 out of 5]

Good discussion - a little shallow on the explanation sometimes, especially for someone who might be less familiar with the behavior of consumers and the economy.