Antitrust law: Ignorance, contradictoriness compounded with irrationality - or something like that

Reader comment on: Judge Cote's Apple Ruling

Submitted by Mark Michael (United States), Jul 11, 2013 17:37

Given Amazon's nominant position in the eBooks market, letting also-rans combine to market eBooks at higher prices to challenge Amazon seems perfectly fine to me. Let the customer decide. If the Apple-led cartel prices their eBooks too high, people won't buy them. It seems that products like software, eBooks that can be distributed for next to nothing but take a lot of resources to write have a natural monopoly. But clearly they do not - if you allow also-ran competitors to pool their limited resources so they can amass enough capital so they can compete with the current dominant player.

The statists who think the government must intervene in the marketplace for these kind of products: Microsoft with their PC OS, then Amazon with their headstart in eBooks, simply refuse to accept the resourcefulness of marketplace actors. Take the PC OS for example. Allegedly, Joel Klein's AT Division (under Bill Clinton) found Microsoft as having a monopoly that only the government could break up. But it's easy to visualize a consortium of large corporations pooling their resources to develop a competing OS to challenge MSFT's OS. Say, a consortium of companies in the same industry that needed just a narrow range of applications they could afford to fund and then share among themselves. Host them on another decent PC hardware setup. (Intel's x86 chip was not the best hardware design by any means!)

Then other industry groups could decide to jointly fund their narrow set of apps for the alternative PC & OS if they were unhappy with the Microsoft/Intel PC product.

But current AT law discourages setting up such industry cartels to pool enough capital to challenge a MSFT/Intel PC OS "monopoly." They themselves will be charged with collusion with a company that's a competitor for their main products. Alan Greenspan's 1960s book reviewed our AT laws and called them a bundle of ignorance, irrationality, and contradictions. Man innately does not believe in Adam Smith's "invisible hand" truth be told. Our DNA is wired up for command economic decisionmaking.

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