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Stephen Moore Thinks You're An Idiot

NRO does economic history:

Antitrust actions may have made sense during the era of Theodore Roosevelt, when firms like Standard Oil could truly monopolize local markets. But in the 21st century, where markets are global, the idea that firms can gouge consumers on prices is as antiquated as the stage coach. Consumers are more fickle and cost-conscious than ever before. If prices get out of line in any market where there are no barriers to entry, competitors swoop in and lower costs so that monopoly rents disappear.

[emphasis added]

Compare and contrast:
Parachutes may have made sense during the era of Theodore Roosevelt, when folks who jumped out of hot air balloons could truly tumble to their deaths. But in the 21st century, where markets are global, the idea that a largish patch of fabric can save you from crushing your bones is as antiquated as the stage coach. Consumers are healthier and better-nourished than ever before. If you jump out of a plane in an atmosphere where there's no air resistance, you'll fall just as fast whether or not you're wearing a parachute.
Now, clearly, Moore is right. There are some monopolies such that low barriers to entry mean there will be no benefit to consumers of breaking the monopoly up. Technological change may impact when and where this is the case. But to claim, as Moore did, that thanks to technological shift all anti-trust actions are now antiquated and that this is because in the present day there are no barriers to entry is absurd.

September 15, 2004 | Permalink


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