Tag Archives: Antitrust

CEI Podcast – October 14, 2010: Antitrust Follies and Regulatory Reform

Have a listen here.

CEI Vice President for Policy Wayne Crews talks about why antitrust actually hurts competition, and offers some ideas for regulatory reform based on his recent articles for BigGovernment.com and The Washington Times, and on his annual Ten Thousand Commandments report.

The Wisdom of George Stigler

George Stigler won a Nobel Prize for his work on the economics of regulation. He wrote extensively about regulatory capture, and in fact coined the term. He was one of only a few sane souls who stubbornly insisted that regulations be judged by their actual results, not their intended results. Good intentions, however noble, are not enough. Here’s an example of Stigler at his finest:

Regulation and competition are rhetorical friends and deadly enemies: over the doorway of every regulatory agency save two should be carved: “Competition Not Admitted.” The Federal Trade Commission’s doorway should announce , “Competition Admitted in Rear,” and that of the Antitrust Division, “Monopoly Only by Appointment.”

-George Stigler, “Can Regulatory Agencies Protect the Consumer?”, from The Citizen and the State: Essays on Regulation (1975), p. 183.

Antitrust as Corporate Welfare for Aggrieved Competitors

Wayne Crews and I have an article in today’s American Spectator about the antitrust crusade against Intel. Our key points:

-An FTC picking winners and losers is not capitalism. It is crony capitalism.

-Chips in “Wintel” desktop computers increasingly constitute just one subset of a vast semiconductor market. Only a small fraction of the chips in non-PC devices are Intel’s — and these devices are where the future lies.

-Regulators’ charges against Intel have changed over the years, but their verdict always remains the same: guilty. Suspicious.

-We’d be better off prosecuting the DOJ and the FTC for colluding against free enterprise.

Andrew Cuomo Sues Intel

cuomo3

Over at the Washington Examiner‘s Opinion Zone, Wayne Crews and I explain why New York Attorney General Andrew Cuomo’s antitrust lawsuit against Intel is a mistake.

Calling Intel’s business practices “bribery” and “coercion” is little more than argument by assertion. Rebates and exclusivity deals are normal competitive behavior. Not only is Intel facing increasing competition in its home turf, that small segment is hardly the extent of the relevant competitive market. Intel faces an uncertain future as consumer tastes shift to smaller products powered by non-Intel chips. Cuomo’s antitrust lawsuit does not stand up to scrutiny. It deserves to be dropped.

Antitrust policies thwart the competitive process whenever and wherever they are applied.

Is Cognitive Dissonance an Insured Condition?

brain-scan_530
Rep. Diana DeGette is, without any apparent cognitive dissonance or trace of irony, proposing:

1) Require, by law, that people buy health insurance.

2) Remove health insurers’ antitrust exemption. But only after legally requiring everyone to buy their product.

You figure it out. Insurers are set to receive one of the largest coroporate welfare grants in history. No wonder so many firms are salivating over this year’s health care legislation. But they may pay an antitrust price for their legally mandated windfall.

Perhaps this is a warped Washington version of what one hand giveth, the other taketh away.

Intel’s Human Rights

While I was away on vacation, the Detroit News ran an article by Hans Bader and me about Intel’s claim that the EU’s $1.45 billion fine against them violates its human rights.

Do Corporations Have Human Rights?

Intel’s defense in its EU antitrust case has taken the surprising line that the company’s human rights were violated. Over at Real Clear Markets, CEI colleague Hans Bader and I take a closer look. We conclude that Intel actually has a pretty good argument.

Corporations have human rights because doing so greatly reduces transaction costs: “suppose your company wants to buy some computer chips from Intel. You could have each shareholder sign the sales contract – good luck finding them all – or you could treat Intel as a person with the right to sign a contract, and the obligation to honor it. To deal with one person or millions? That is why corporations have legal standing as individuals.”

In short: no corporate rights, no modern economy. No exaggeration. There is a reason why legal conventions emerge as they do, even if they appear strange at first glance.

Iain Murray was kind enough to point out to me that the idea of corporate human rights has very deep roots. The 18th-century legal scholar William Blackstone, in his revered analysis of the English common law, wrote that corporations have the right “[T]o sue or be sued,, implead or be impleaded, grant or receive, by its corporate name, and do all other acts as persons may.”*

*William Blackstone, Commentaries on the Laws of England, Volume 1: Of the Rights of Persons, (Chicago: University of Chicago Press, 1979 [1765]), p. 463.