An Open Letter to President Clinton from 240 Economists on
advertisement
An Open Letter to President Clinton from 240 Economists on Antitrust Protectionism Dear President Clinton: Antitrust is supposed to be about protecting consumers against higher prices and other consequences of monopoly power. Accordingly, the Justice Department’s Antitrust Division, the Federal Trade Commission, and state attorneys general are vested with authority to defend competition and protect the well-being of consumers. The current spate of heightened antitrust activism seems to suggest that anti-competitive business practices abound. Headline-grabbing cases against Microsoft, Intel, Cisco Systems, Visa and MasterCard, along with a flurry of merger investigations now under way, would appear to demonstrate the need for a vigorously enforced antitrust policy that will create checks and balances to eliminate consumer harm. However, consumers did not ask for these antitrust actions — rival business firms did. Consumers of high technology have enjoyed falling prices, expanding outputs, and a breathtaking array of new products and innovations. High technology markets are among the most dynamic and competitive in the world, and it is a tribute to open markets and entrepreneurial genius that American firms lead in so many of these industries. But, these same developments place heavy pressures on rival businesses, which must keep pace or lose their competitive races. Rivals can legitimately respond by improving their own products or by lowering prices. Increasingly, however, some firms have sought to handicap their rivals’ races by turning to government for protection. Where antitrust authorities respond to these protectionist demands, the workings of markets are short-circuited. Antitrust protectionism means that market decisions about how to compete for consumers’ favor are displaced by bureaucratic and political decisions. More of the energies of firms are directed to politics, less to production and innovation. Successful innovators are penalized, scale economies are lost, and competition is thwarted, not enhanced. Instead of preventing prices from rising, antitrust protectionism keeps prices from falling. Many of these cases are based on speculation about some vaguely specified consumer harm in some unspecified future, and many of the proposed interventions will weaken successful U.S. firms and impede their competitiveness abroad. The cost-benefit test for antitrust has not been met. We urge antitrust authorities to abandon antitrust protectionism and refrain from such speculative enterprises when actual consumer harm cannot be shown. Donald L. Alexander William R. Allen Lee J. Alston Ryan C. Amacher Gary M. Anderson D. T. Armentano George B. N. Ayittey Howard Baetjer, Jr. Charles W. Baird Ray Ball King Banaian William Barnett, II L. Dwayne Barney Daniel K. Benjamin James T. Bennett Bruce L. Benson David E. Bernstein Michael L. Bognanno Cecil E. Bohanon Ben W. Bolch Thomas E. Borcherding Samuel Bostaph Donald J. Boudreaux Charles H. Breeden Andrzej Brzeski Richard C. K. Burdekin Henry N. Butler Colin D. Campbell Noel D. Campbell Thomas F. Cargill Phillip P. Caruso Ronald A. Cass Jeffrey R. Clark William M. Clark Carl P. Close R. Morris Coats John Cochran Lloyd R. Cohen Roy E. Cordato Jim F. Couch K. Chris Cox Eleanor D. Craig Robert G. Crawford Jerry W. Dauterive David G. Davies Louis De Alessi Arthur S. De Vany Michael E. DeBow Henry G. Demmert Matthew S. DePoint Arthur M. Diamond, Jr. Thomas J. DiLorenzo William R. Dougan William M. Doyle, Jr. Michael Eames Robert B. Ekelund, Jr. Jerome R. Ellig Edward W. Erickson Paul Evans William P. Field, Jr. Darren Filson William A. Fischel Arthur A. Fleisher, III Fred E. Foldvary Robert L. Formaini William J. Frazer Lowell E. Gallaway Gary M. Galles Roger W. Garrison David E. R. Gay R. Richard Geddes William D. Gerdes Joseph A. Giacalone Adam Gifford, Jr. Thomas W. Gilligan Micha Gisser Rodolfo A. Gonzalez Peter Gordon Richard L. Gordon Gerald A. Gunderson Western Michigan University University of California, Los Angeles University of Illinois University of Texas, Arlington California State University, Northridge University of Hartford American University George Mason University California State University, Hayward University of Rochester St. Cloud State University Loyola University Boise State University Clemson University George Mason University Florida State University George Mason University Temple University Ball State University Rhodes College Claremont Graduate University University of Dallas Foundation for Economic Education Marquette University University of California, Davis Claremont McKenna College University of Kansas Dartmouth College North Georgia College & State University University of Nevada Western Michigan University Boston University University of Tennessee University of Oklahoma The Independent Institute Nicholls State University Metropolitan State College George Mason University Campbell University University of North Alabama Nicholls State University University of Delaware Brigham Young University Loyola University Duke University University of Miami University of California, Irvine Samford University Santa Clara University St. Cloud State University University of Nebraska Loyola College in Maryland Clemson University University of Dallas Santa Clara University Auburn University George Mason University North Carolina State University Ohio State University Nicholls State University Claremont Graduate University Dartmouth College Metropolitan State College Santa Clara University University of Texas, Dallas University of Florida Ohio University Pepperdine University Auburn University University of Arkansas Fordham University North Dakota State University St. John’s University California State University, Northridge University of Southern California University of New Mexico San Jose State University University of Southern California Pennsylvania State University Trinity College David D. Haddock Northwestern University Simon Hakim Temple University J. Daniel Hammond Wake Forest University Steve H. Hanke Johns Hopkins University Ronald W. Hansen Univerity of Rochester Scott E. Harrington University of South Carolina C. Lowell Harriss Columbia University Robert F. Hebert Auburn University Frank L. Hefner College of Charleston Robert H. Heidt Indiana University David R. Henderson Hoover Institution Robert S. Herren North Dakota State University Robert Higgs The Independent Institute Peter J. Hill Wheaton College George W. Hilton University of California, Los Angeles Randall G. Holcombe Florida State University John B. Horowitz Ball State University Ronald A. Howard Stanford University Laurence R. Iannaccone Santa Clara University Gail A. Jensen Wayne State University Dennis A. Johnson University of South Dakota Ronald N. Johnson Montana State University Benjamin Klein University of California, Los Angeles Daniel B. Klein Santa Clara University Alan E. Koczela George Mason University Robert Krol California State University, Northridge Lawrence A. Kudlow American Skandia Life Assurance Corp. Timur Kuran University of Southern California David N. Laband Auburn University Deepak K. Lal University of California, Los Angeles Steven E. Landsburg University of Rochester Don C. Lavoie George Mason University Robert A. Lawson Capital University Dwight R. Lee University of Georgia Gary D. Libecap University of Arizona Wesley J. Liebeler University of California, Los Angeles Stan J. Liebowitz University of Texas, Dallas Anthony K. Lima California State University, Hayward Jody Lipford Presbyterian College Dennis E. Logue Dartmouth College Edward J. Lopez University of North Texas John R. Lott, Jr. University of Chicago William R. Luckey Christendom College Hugh H. Macauley Clemson University Paul G. Mahoney University of Virginia Michael T. Maloney Clemson University Yuri N. Maltsev Carthage College Henry G. Manne George Mason University Stephen E. Margolis North Carolina State University Nelson Mark Ohio State University Michael L. Marlow California State Polytechnic University John G. Matsusaka University of Southern California Thomas H. Mayor University of Houston Nolan McCarty Columbia University Fred S. McChesney Cornell University Deirdre N. McCloskey University of Iowa Paul W. McCracken University of Michigan Thomas Means San Jose State University Roger E. Meiners University of Texas, Arlington David I. Meiselman Virginia Tech University Lloyd J. Mercer University of California, Santa Barbara Tracy C. Miller Grove City College Jeffrey D. Milyo Tufts University Jeffrey A. Miron Boston University William C. Mitchell University of Oregon Michael Montgomery University of Maine Carlisle E. Moody College of William & Mary Ronald L. Moomaw Oklahoma State University Thomas Gale Moore Hoover Institution Andrew P. Morriss Case Western Reserve University Michael Valdez Moses Duke University Craig M. Newmark North Carolina State University William A. Niskanen Cato Institute Lydia D. Ortega San Jose State University Dale Osborne University of Texas, Dallas Evan Osborne Wright State University Allen M. Parkman University of New Mexico Ernest C. Pasour, Jr. North Carolina State University Judd W. Patton Bellevue University Mark J. Perry University of Michigan Mary Bennett Peterson William H. Peterson Owen R. Phillips Keith T. Poole Barry W. Poulson B. Michael Pritchett Richard W. Rahn David W. Rasmussen George G. Reisman Alan Reynolds Morgan O. Reynolds Edward M. Rice James R. Rinehart Shawn Ritenour Paul Craig Roberts Jerry K. Rohacek Charles K. Rowley Randall R. Rucker Roy J. Ruffin Gerard G. Russo Kevin D. Sachs Joseph T. Salerno Michael T. Saliba David S. Saurman E. S. Savas Thomas R. Saving Lawrence J. Sechrest Stephen Sheppard Stephen Shmanske William F. Shughart II Olga Shvetsova Barry N. Siegel Randy T. Simmons Gene R. Simonson Gene Smiley Vernon L. Smith Russell S. Sobel Lee C. Spector Frank G. Steindl Paul B. Stephan Houston H. Stokes Courtenay C. Stone Daniel Sutter Shirley V. Svorny Charles Swanson Alexander T. Tabarrok David J. Theroux Clifford F. Thies Henry Thompson Richard H. Timberlake Robert D. Tollison Mark Toma George W. Trivoli Gordon Tullock Charlotte Twight Michelle A. Vachris Karen I. Vaughn Richard K. Vedder Harry C. Veryser Richard E. Wagner Deborah L. Walker Stephen J. K. Walters Alan Rufus Waters Thayer Watkins Robert O. Welk John T. Wenders Samuel C. Weston Harry White Lawrence H. White Richard W. Wilcke Thomas D. Willett Arlington W. Williams Mary L. Williams Peter M. Williams Walter E. Williams Bruce Yandle DeVon L. Yoho Ben T. Yu Thomas S. Zorn Benjamin Zycher General Motors Corporation Campbell University University of Wyoming Carnegie Mellon University University of Colorado Brigham Young University Novecon Corporation Florida State University Pepperdine University Hudson Institute Texas A & M University University of Washington Francis Marion University Southwest Baptist University Institute for Political Economy University of Alaska George Mason University Montana State University University of Houston University of Hawaii University of Cincinnati Pace University Loyola University San Jose State University Baruch College, C.U.N.Y. Texas A & M University Sul Ross State University Oberlin College California State University, Hayward University of Mississippi Washington University University of Oregon Utah State University California State University, Long Beach Marquette University University of Arizona West Virginia University Ball State University Oklahoma State University University of Virginia University of Illinois,Chicago Ball State University University of Oklahoma California State University, Northridge Temple University The Independent Institute The Independent Institute Shenandoah University Auburn University University of Georgia University of Mississippi University of Kentucky Jacksonville State University University of Arizona Boise State University Christopher Newport College George Mason University Ohio University Walsh College George Mason University Loyola University Loyola University California State University, Fresno San Jose State University Row Tek Economics University of Idaho University of Dallas Boise State University University of Georgia University of Louisville Claremont Graduate University Indiana University Widener University University of North Alabama George Mason University Clemson University Ball State University California State University, Northridge University of Nebraska University of California, Los Angeles For further details, including information on the following books and other publications, please contact the Independent Institute: WINNERS, LOSERS & MICROSOFT: Competition and Antitrust in High Technology by Stan J. Liebowitz and Stephen E. Margolis, foreword by Jack Hirshleifer ANTITRUST AND MONOPOLY: Anatomy of a Policy Failure by D. T. Armentano, foreword by Yale Brozen THE CAUSES AND CONSEQUENCES OF ANTITRUST: The Public-Choice Perspective edited by Fred S. McChesney and William F. Shughart II The Independent Institute, 100 Swan Way, Oakland, CA 94621-1428 • 510-632-1366 • Fax 510-568-6040 • info@independent.org • www.independent.org
