Thursday, 4 August 2005

'Free Competition' at gunpoint

    Most western countries have laws against 'anti-competitive behaviour,' and most people think those laws are there to protect consumers. Think again. "As Microsoft's current troubles in Europe show, that ain't necessarily so." So says a review at TechCentralStation of a new book, 'The Abolition of Antitrust,' that argues cogently those laws should go.
    The book is at its most effective when the authors distinguish clearly between force and voluntary action and when they tell horror stories about antitrust. Exhibit A of the latter is the DuPont cellophane story. The book's editor, philosopher Gary Hull, tells of clear-eyed DuPont chemists perfecting cellophane in the 1920s and creative marketers marketing it in the 1930s, revolutionizing the sale of bread, cake and other items. By 1940, a national poll found that Americans' most cherished words were, in order, "mother," "memory," and "cellophane." Then came antitrust. The government charged that DuPont had "monopolized" the cellophane market. Most antitrust texts point out that the government lost the case. But Hull points out something that I had never read in 35 years of reading about antitrust: DuPont helped assure its "victory" by canceling its expansion plans and actually building a cellophane plant for a competitor, Olin Industries.
    We have our own version of Antitrust here in New Zealand policed by the Commerce Commission, who keep a beady eye on what they call anti-competitive practices. They don't unfortunately include themselves in the list of those on whom they keep that beady eye affixed. Every large-ish merger, acquisition or takeover in New Zealand has to be approved by the bureaucrats at the Communist Commission before legal approval for businessmen to act on their own judgement can be given.  
    Remember the long, long delays in disapproving Air New Zealand's various bids for approval to sell its shares to first Singapore Airlines and thence Qantas, before the taxpayer was forced by the politicians to stump up nearly a billion dollars to bail it out? Blame the Communist Commission, a creation of the Douglas/Lange Labour Government.
    If anyone is looking at making tax savings, they could do a lot worse than to add the Communist Commission to their list. Promoting 'free competition' at gunpoint is not just uncivilised, unethical and unsuccessful, it's also illogical.

1 comment:

  1. Yeah man, how come there's only one Commerce Commission?


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