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.

Share
Single Page
undefined

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

Get access to 165 years of
Harper’s for only $45.99

United States Canada

  • 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.

CATEGORIES

THE CURRENT ISSUE

July 2015

Dressed to Kill

= Subscribers only.
Sign in here.
Subscribe here.

Wrong Prescription?

= Subscribers only.
Sign in here.
Subscribe here.

Travel Day

= Subscribers only.
Sign in here.
Subscribe here.

Fugue State

= Subscribers only.
Sign in here.
Subscribe here.

One Day Less

= Subscribers only.
Sign in here.
Subscribe here.

view Table Content

FEATURED ON HARPERS.ORG

Article
Avian Voices·

= Subscribers only.
Sign in here.
Subscribe here.

“The mockingbird’s bath is an orgy of thrashing and writhing about. When he has finished, one of the innocents alights on the rim of the basin and looks with disbelief at the thimble of water remaining.”
Illustration by Eric Hanson
[Browsings]
Before the War·

= Subscribers only.
Sign in here.
Subscribe here.

“I’m worried that what the Houthis did to push Yemen into a civil conflict in September 2014, the Saudis may end up doing again when they end their campaign by eliminating the Houthis.”
Photograph by Alex Potter
Article
The Speakeasy·

= Subscribers only.
Sign in here.
Subscribe here.

“In order to understand how Marty’s could survive as an institution, I returned a year after my first visit to spend a week at what was sure to be the world’s bleakest comedy club.”
Photograph by Mike Slack
Post
The Lost Land·

= Subscribers only.
Sign in here.
Subscribe here.

“I had first encountered some of these volumes—A Swiftly Tilting Planet, The Giver—as a child, and during adolescence, they registered as postcards from a homeland recently abandoned.”
Photograph by the author
Article
Wrong Prescription?·

= Subscribers only.
Sign in here.
Subscribe here.

“Whatever the slogans suggested, the A.C.A. was never meant to include everyone.”
Illustration by Taylor Callery

Date on which a U.S. patent was issued for a phone with which pets can call their owners:

2/1/11

Bees can count to four.

Washington University researchers found that obese Americans outnumber overweight Americans.

Subscribe to the Weekly Review newsletter. Don’t worry, we won’t sell your email address!

HARPER’S FINEST

Subways Are for Sleeping

By

“Shelby is waiting for something. He himself does not know what it is. When it comes he will either go back into the world from which he came, or sink out of sight in the morass of alcoholism or despair that has engulfed other vagrants.”

Subscribe Today