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August 1998
Volume 16, Number 8

Antitrust for Fun and Profit
by Llewellyn H. Rockwell, Jr.

Janet Reno couldn't get the hang of computers. By her own account, she couldnt tell "what was on the hard drive, what was on the soft drive." So she prefers "paper and pencil."

Then she arrogantly sets herself up as Americas computer czar, claiming to know better than tens of millions of consumers about operating systems and software.

A week after admitting her ignorance, Reno stood with her swat team of predatory government lawyers and announced a proposed legal looting of Microsoft, an attempt to destroy a company that has spectacularly served the cause of prosperity and innovation--unlike the so-called Justice Department. In particular, she wants to stop use of the new Windows 98 software that provides better, faster access to the Internet and other improvements.

Antitrust sums up everything that is wrong with the state. While pretending to be competent and moral, government is stupid and evil.

Antitrust bureaucrats have been running roughshod over free enterprise for more than a century, imposing themselves between consumers and companies at the behest of envious competitors.

In antitrust, stumbling businesses, tired of battling the leader on the free market, turn to the government for special privilege. In the old days, it required research to discover who the conspirators were. In the case of Microsoft, bitter rivals like Sun Microsystems and Netscape have been open about their designs, and celebrated as Reno pumped the legal equivalent of CS gas into Microsoft's boardroom.

At their behest, the Justice Department has done much more than decide that an "operating system" cant go with a "browser," a product which didn't exist in all of human history until a few years ago.

The government has decided that computer software is public property and therefore can be regulated in every respect. Whats at stake in this battle is not an obscure matter of industrial organization, but the very future of entrepreneurship itself.

At root, the government is claiming that "competition" is something other than what the market economy generates. It is, instead, an abstraction constructed by government economists, who claim to know how many businesses there should be in an industry, what prices they should charge, and what kinds of voluntary contracts they should be able to make with retailers and consumers.

In this cause, Netscape had thought it scored big when it signed Robert Dole to its team of consultants. But as a politician, hes always been for sale. All his payoff underscored was that Netscape has better relations with Washington types than Microsoft has. No, the real public-relations coup for Netscape was signing up ex-government judge Robert Bork for a high fee.

Bork, a man who has periodically celebrated the "original intent" of the framers and who once wrote a book decrying antitrust excesses, now says Microsoft should be smashed. But when I accused him of violating his own principles, he was quick to clarify that he has always believed in D.C. bullying of a company that "employs practices and extracts agreements that exclude rivals." Moreover, he denies he is making a high fee; he is simply charging Netscape "the same hourly rate I charge all clients."

The antitrust lexicon Bork employs is biased to serve the state and its interests. Voluntary contracts become "force" and government invasion of property becomes "competition." Once you start looking for what he calls monopolies--and define them as something other than a government grant of privilege--you find them everywhere.

Consider Bork's own "monopoly" abilities, of which he has a 100 percent share. By agreeing to work for Netscape and not others, he excludes rivals from access. His lobbying fees represent huge monopoly profits. He can sell his services to anyone who can afford them, on terms he agrees to, but he doesn't believe that Microsoft should be able to do the same.

D.C. lobbying of his sort wouldn't exist in a free society, as versus the highly moral calling of entrepreneur. But then, if Bork were concerned with morality, he wouldnt be taking payola to balloon the most swollen monopoly in the history of the world, the U.S. government.


Llewellyn H. Rockwell, Jr. is president of the Ludwig von Mises Institute.


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