The Free Market 18, no. 5 (May 2000)
It was a revolting display to see the bureaucrats at the Justice Department cheer Federal Judge Thomas Penfield Jackson’s decision. Many of these people didn’t even know how to get around the web twelve months ago, and now they are making decisions for millions of consumers and threatening to smash the company that democratized information. The government, driven by power-lust and fueled by the envy of Microsoft’s competitors, is happy to jam a crowbar into the wheel of commerce.
Some old-time conservatives had a soft spot for antitrust laws. They believed in free enterprise, but made exceptions for interventions that curb the activities of corporations. In this, they are joined today by free-market economists of the Chicago School: critical of the way antitrust laws have been applied, but stopping short of demanding their repeal.
Yet it has never been clearer that antitrust is exactly what the economists of the Austrian School have always claimed: a political weapon that accomplishes no social good and imposes much social harm. Exhibit A is, of course, the absurd Microsoft case, in which the government is attacking a wonderful company on technical issues now years out of date.
Strip away the jargon, and it is clear that the government wants to nationalize Windows, the operating system that has brought the miracles of online commerce, research, and entertainment to the world. When the government ran the Internet, it was a dead system of transfer messages between government offices. Microsoft has shown what private enterprise does: change the world for the better.
Just as revealing, however, is another antitrust case that has been ignored. The same state officials who have caused so many headaches for the software industry are considering a frontal assault on the gun industry. States are now seeking to prove that the gun industry is a cartel that needs to be broken up.
Now, a cartel is supposed to be a group of manufacturers who work in concert to dictate prices. No such thing can exist on a free market, since there are no state-created barriers to entry, the temptation to compete by cutting prices is strong, the available options are plentiful, and the market is so internationalized as to make any claims of market power spurious on their face. Even Opec would not have its current level of influence if taxes and production and distribution regulations were repealed, land use not restricted, and free trade unhampered.
There is no such thing as an effective, dangerous cartel on the free market. And there is no such thing as a gun cartel now. A free market in firearms prevails in all aspects of the industry where government doesn’t outlaw it. Visit a gun store or a Wal-Mart and you find an amazing array of styles, prices, and manufacturers, and they are all competing with each other. Consumers are in the driver’s seat as they weigh all the factors that go into a firearm purchase.
How can gun manufacturers be accused of violating antitrust rules? Political elites have noticed that they are all united in opposition to increased government regulation of their industry, exactly as they should be. Recently this took the form of an awe-inspiring boycott of Smith & Wesson for having struck a deal with the government over issues of trigger locks, unapproved retail outlets, and sales of firearms at gun shows.
All over the country, dealers are dropping the gun maker from their inventory, and consumers are boycotting stores that refuse to drop the line. Shooting ranges have even refused to admit the company’s representatives. The boycott has been devastating to Smith & Wesson, threatening the company’s future profits and tarnishing its name in the eyes of every lover of freedom.
Citing the effectiveness of the boycott, some state attorneys general are claiming that this alone is proof of cartel-like behavior-because the industry is nearly united in opposition to being plundered. This is the equivalent of suing taxpayers as a cartel because they all hate new taxes.
And consider the bitter irony of the claim that gun interests constitute a cartel for going after S&W. One minute, people buying S&W firearms are considered public enemies and guilty of spreading violence and mayhem. In a flash, the rationale is changed, so that people who do NOT buy S&W firearms are considered a dangerous cartel refusing to grant the company its just share of profits in the firearms market. You are part of a militia conspiracy if you buy or part of an evil cartel if you don’t buy.
Antitrust is applied selectively to those industries and firms deemed to be threats to the regime. As with all economic regulation, it is passed and used by political interests to effect a certain political result.
The romantics who imagined antitrust could be used impartially were naive. Anytime you permit the central state to attack free enterprise and private property, you are permitting political power to be used against political enemies. And those whom the state regards as political enemies are a predictable bunch: those who oppose government’s desire to take away freedom. That’s why all lovers of freedom should support any industry attacked by antitrust.
Llewllyn H. Rockwell, Jr. [rockwell@ mises.org], is president of the Mises Institute.
