Commentary — March 14, 2012, 1:34 pm

The DOJ’s Misguided Antitrust Attack

The Obama Administration tackles the victim in the fight over America’s book market

Barry C. Lynn is the author of Cornered: The New Monopoly Capitalism and the Economics of Destruction. He directs the Markets, Enterprise, and Resiliency Initiative at the New America Foundation. His feature “Killing the Competition: How the New Monopolies Are Destroying Open Markets” appeared in the February 2012 issue of Harper’s Magazine, and is available for free online. A previous article, “Breaking the Chain: The antitrust case against Wal-Mart” (July 2006), is also available.

In 1890, Congress passed America’s first federal antimonopoly law, the Sherman Antitrust Act, by an overwhelming margin. The intent was to protect the nation’s markets and break up its concentrations of economic and political power. But almost immediately, the very plutocrats targeted by the law figured out how to turn it to their advantage. It was the unions of the workingman, they said, and the cooperatives of the farmer, that were the truly dangerous cartels. And with some help from business-friendly courts, the big man was made free to use the Sherman Act against the little man.

After twenty years, the American people at last regained some control of this powerful set of laws. And although, in the century since, administrations have often chosen not to enforce those laws, they have also generally resisted attempts to once again turn these laws against the actual victims of power.

Last week, however, President Obama’s Justice Department weighed in on the ongoing fight over who gets to price America’s books—the people who write and publish those books, or Amazon. And rather than target Amazon, which has captured de facto monopoly control over the U.S. market for books, the DOJ threatened the publishers subject to Amazon’s power.

The supposed crime of these companies? To insist on their right to price their own products and compete freely and openly with one another, without being manipulated by a giant trading company serving its own private interests.

What makes the DOJ’s approach especially sad is that its antitrust enforcers apparently mean well. Unlike the appointees of, say, George W. Bush, many, if not most, Obama Administration employees actually seem to want to serve the public interest. Unfortunately, these men and women find their ability to do so warped by an ideology they do not fully understand.

For America’s first 200 years, the aim of our antimonopoly laws was to ensure the safe distribution of power. This was true even during those periods when the law was not being enforced. Then, in the 1970s and 1980s, a strange alliance of corporate libertarians, Galbraithian socialists, and consumer activists concluded that it was better to promote “efficiency” instead, as measured mainly by lower prices.

The real-world result? Ever since, every would-be monopolist in America has been largely free to concentrate power at will, right up to complete control over an entire market. The only requirement was the ability to claim that lower prices would result. And so it was proved again the other day: Amazon promised the American consumer a few pennies in savings, and the DOJ, in the name of the people, signed away some of our most fundamental liberties.

Getting ourselves out of this mess will require two minor revolutions, one intellectual and one political.

First, the time has come for America’s antitrust “experts” to face up to the fact that the original and primary purpose of these laws was not to serve the consumer by promoting “efficiency,” but to protect the liberties of the American citizen through the safe distribution of power.

Second, those citizens directly affected–every American writer, editor, publisher, and reader–must decide where they stand. Those who prefer to work in a system where a single private boss micromanages the book business are free to do nothing. But those who believe it best to organize this vital activity in an open and transparent market have a duty to act now.

Sure, Amazon will retaliate. But even this Goliath shall fall, once enough little people stand up for the same open markets and liberties that served us so well for our first 200 years.

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More from Barry C. Lynn:

Commentary February 3, 2012, 1:58 pm

Obama’s Big Shtick

From the February 2012 issue

Killing the Competition

How the new monopolies are destroying open markets

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  • AuntyMM

    it’s usually overlooked that these mergers tend to result in consumers’ loss of the products as they were produced by the swallowed corporation. it is typical that the swallower alters and debases the product that made the swallowed corporation valuable. crazy.

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