May 20 2009

Whither the “unrestrained free market”?

Category: Uncategorizedharmonicminer @ 9:13 am

After recounting the sad history of “trust busting” and “anti-monopoly” laws, the following very excellent question is asked by dominick T. Armentano of the Christian Science Monitor:

Based on this history, why should we think the Obama antitrust regulators will get it right this time? In her recent speech, Ms. Varney, the antitrust chief, said that “there is no adequate substitute for a competitive market.” Absolutely correct.

But competitive markets are legally open markets where all firms, including dominant firms, are rivalrous on their merits and where consumers – and not government or judges – decide winners and losers. Free markets may need protection from fraud (think Bernard Madoff), but they don’t need antitrust intervention.

If you think Mr. Armentano’s remembrance of anti-trust history is flawed, read this. Be prepared for a revised understanding of so-called “robber barons” and “capitalist monopolists,” and, indeed, of whether the USA has *ever* had a truly capitalist free market.

It has been 120 years or more since the USA reached its zenith of free-market capitalism, and even that was flawed with government interference.  Since then, there has been a steady erosion of free markets, with constant attempts by government to pick winners and losers.  In addition, we have continually had the sorry spectacle of government blaming on the free market the very problems that were created by government interference in the market.

Doubt this?  I have three other book to suggest:

Basic Economics” by Thomas Sowell, and “Economic Facts and Fallacies” by the same author.

For a reasonably entertaining introduction to the thought of Adam Smith, try this.