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Antitrust laws)
- Antitrust is also the name for a movie, see Antitrust (movie)
Antitrust or competition laws, legislate against trade practices that undermine competitiveness or are considered to be unfair. The term antitrust derives from the U.S. law that was originally formulated to combat business trusts - now commonly known as cartels.
Criticisms of Antitrust
Monopolistic firms are commonly said to be in a privileged position to reap economic benefits by restricting output and raising prices. However, according to research by Thomas Woods, the industries most frequently accused in the late nineteenth century of holding a monopolistic posititon were neither restricting output nor raising prices.
The Results of "Predatory Pricing": Commodity Prices from 1880-1890
| Steel | ↓58%
|
| Zinc | ↓20%
|
| Sugar | ↓22%
|
During the 1880s output of monopolistic industries grew seven times faster than the overall economy, while prices in these industries were generally falling—even faster than the 7% rate of decline that occurred in the economy as a whole.
Nobel economist Milton Friedman said, "When I started in this business, as a believer in competition, I was a great supporter of antitrust laws; I thought enforcing them was one of the few desirable things that the government could do to promote more competition. But as I watched what actually happened, I saw that, instead of promoting competition, antitrust laws tended to do exactly the opposite, because they tended, like so many government activities, to be taken over by the people they were supposed to regulate and control. And so over time I have gradually come to the conclusion that antitrust laws do far more harm than good and that we would be better off if we didn’t have them at all, if we could get rid of them. But we do have them." Antitrust Law -- Articles & Definitions
References
- Thomas E. Woods, Jr., Ph.D (2004). The Politically Incorrect Guide to American History, 99.
- ^ The Business Community's Suicidal Impulse by Milton Friedman A criticism of antitrust laws and cases by the Nobel economist