June 27, 2023
Over at AIER and then reprinted at The Independent Institute’s Beacon Blog, Mike Munger takes aim at antitrust policy by highlighting a classic contradiction it faces.
For context, a few choice quotes:
“I hope you see the problem. It’s actually antitrust policy itself that blocks innovation and puts up a big “open for business” sign in the courts for special pleadings by rent-seeking entities in the society. Artificial restrictions on price, either ceilings or floors, create valuable “rents,” or unearned bonuses, for unscrupulous litigants and lobbyists. Attaching a moral authorization to rent-seeking makes the problem much, much worse.”
Right. Antitrust has always had a means-ends compatibility problem.
“And that’s the important thing: In no case, in not one single documented instance, has WalMart then raised its prices, after driving out competing “mom-and-pop” or other retailers. Consumers don’t sign on to Amazon because it’s a monopoly; they use Amazon because their prices are lower, their selection is wider, and their delivery costs are cheaper.”
Right. Antitrust advocates spin stories of predatory pricing boogeymen, but where, exactly, is the evidence? 
“As for “collusion,” the problem is more one of intent. If I see a corner with three gas stations, and they are all charging $3.67 per gallon for regular gas, should I call the Justice Department? Having similar prices for the same commodity is just called “competition,” and in fact the doctrine of a single price is one of the key assumptions of the classical model of perfect competition, borne out in laboratory experiments when competition, not monopoly, is the driving force.”
Right. What, exactly, is wrong with “collusion?” (Serious question).
My favorite part of the article, though, is Munger’s raising of an old, classic contradiction at the heart of antitrust.
“It’s a women’s prison, and one of the long-time inmates asks, “What are you ladies in for?”
One woman responds that she was charging prices that were too high, and people were upset because she was price-gouging. Price-gouging, of course, is a sign of abuse of monopoly power, as we “all know.”
The second woman answers that she was charging prices that were the same as her competitors. But that’s an obvious antitrust violation, price-fixing, a sign of abuse of monopoly power, as we “all know.”
The third woman replies that she was charging prices that were less than her competitors, and that’s obviously predatory pricing, trying to drive her competitors out of business, a sign of abuse of monopoly power, as we ‘all know.’”
Except I’d only ever heard this expressed in an old classic children’s poem, Tom Smith and His Incredible Bread Machine. 
Before sharing this poem in class, I always tell my students I’m about to provide them with business advice that is free at the margin. If they follow my advice, I’m certain they’ll never draw the ire of the Department of Justice.
Munger concludes by pointing to the resurgence of popularity that antitrust is experiencing in neo-Brandeisian corners of D.C. I’d only add that fervor for antitrust on the left can seemingly only be matched these days by fervor for antitrust on the so-called “new right.”
Among these advocates—left and right—I’ve yet to see (maybe I missed it) interaction with the thinking of Dominick Armentano. Or Yale Brozen. Or Harold Demsetz. Or Murray Rothbard. Or Israel Kirzner. Or William Baumol. Or Hans Sennholz. Or Burt Folsom. Or Sudha Shenoy. Or Frank Machovec. Or Oliver Williamson. Or Roger Koppl. Or Thomas DiLorenzo. Or Paul McNulty. Or John McGee. Or Fred McChesney. Or Crandall and Winston. Or Ludwig von Mises. Or Don Boudreaux. Or Jack High. Or Robert Bork. Or Thomas Hazlett. Or Richard Langlois. Or Joseph Schumpeter.
But—I suppose—hope springs eternal.