Whatever happened to free trade? I keep on asking this question given that the economic establishment is firmly committed to it in name, but acts in precisely the opposite direction. And although I am certainly not the only one asking the question, I am virtually the only one in the UK.
The baddie at the heart of this story, who managed to transform a doctrine that allowed the small to challenge the big into something that featherbeds the giants, is usually Milton Friedman. But the magazine American Conservative fingers one of his acolytes, Robert Bork, who was controversially named a supreme court justice by Ronald Reagan in 1987, and then voted down by the Senate.
Bork’s book, The Antitrust Paradox, was hugely influential and advocated ending controls on mergers in the name of economies of scale.
I could not put it better than Daniel Kishi does in his article:
“In the four decades since the publication of The Antitrust Paradox, corporate concentration has remade nearly every corner of the U.S. economy. According to a study by The Economist, two thirds of all corporate sectors have become more consolidated since 1990. To name but a few examples: three drug stores control 99 percent of their market; four airlines control 80 percent of the domestic aviation market; and two companies, Facebook and Google, control 75 percent of the digital advertising market. And the trend is continuing, from agriculture to health insurers, defense contractors to beer. A growing body of research suggests such consolidation is responsible for a whole host of economic repercussions, including wage stagnation and income and wealth inequality. But perhaps most importantly, the adoption of Bork’s “consumer welfare” standard has fundamentally reoriented what it means to be a citizen of the United States. Whereas prior generations of lawmakers protected the American citizenry as businessmen, entrepreneurs, and growers, Bork led a revolution that sacrificed the small producer at the altar of efficiency and cheap goods. With the publication of The Antitrust Paradox 40 years ago, the American citizen was, in a very real sense, reduced to a mere consumer.”
When the associate editor of one of the most prominent conservative magazines in the USA writes something like this, you know the writing is on the wall.
And in the UK, Vince Cable has called for the break-up of the Big Four accountancy firms, one of the engines of giantism in the UK. Major anti-trust action is clearly on the way.
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