Company A acquires Company B. Two years pass. An FTC administrative law judge decides the merger was bad for consumers — largely based on the testimony of “experts” who happen to be FTC employees. He says the merger should be undone. By restoring the market to its earlier state, things will be better.
That’s not the end of the story. Company A can appeal. And if they win their appeal, the FTC can appeal. And so on and so on. Eventually, six or seven years may elapse before the merger is undone and the market “restored” to its earlier form. This system, we’re told, is far superior to a free market, where there would be no FTC to challenge private mergers in the first place.
This is a real case. The details are largely irrelevant. It all comes down to a simple question: Is “competition” a static condition or a dynamic process? The FTC thinks it’s the former, that competition is like a fixed point on the time-space continuum that can be “restored” to prevent change. Certainly, it’s easier for government agencies to plan the economy this way: Just identify the point in time where “competition” was at its greatest level, then use the authority of the state to fix the industry’s structure accordingly. No mess, no fuss.
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“all competition is good” (except for competition in who gets make, interpret, and uphold the law, which of course includes deciding what is and is not competition.)
Competition Is A Meaningless Economic Concept, By Itself!
Competition in the market is held up as a mighty emblem by the ego-driven interpreters but actually it is a half-truth!
The essential reality of the market process can only be understood by acknowledging and respecting competitive entrepreneurship. To single out competition, as is done in the pseudo-economic world of empiricism, is similar to claiming that the atmosphere is made of oxygen. Depending on the degree of knowledge of the claimant that is either a half-truth or ignorance or a lie. Light a match and see if the atmosphere is 100% oxygen!
To understand the atmosphere the rest of its components need to be recognized. To understand the economy – which is a reflection of human action – the entrepreneurial spirit has to be recognized. In fact the two are inseparable and so the correct description of human action, and therefore of the economy at the loci of decision-making, is to refer to it as competitive entrepreneurship.
Empirical economists who talk about and postulate about ‘competition’ are talking nonsense and are engaged in a fantasy that is destructive. Further, the ego-driven interpretation that necessarily stems from these empirical economists just fuels the fire of ego-driven interventionism which is scorching the earth: destroying wealth, undermining peace, and spreading corruption and strife.
Competition in and of itself is not always good for the consumer. Consider how much is saved for the consumer in time and money by a Wal-Mart Supercenter as opposed to the old Down Town shopping model.
Competition in and of itself is not always good for the consumer. Consider how much is saved for the consumer in time and money by a Wal-Mart Supercenter as opposed to the old Down Town shopping model.
“Consider how much is saved for the consumer in time and money by a Wal-Mart Supercenter as opposed to the old Down Town shopping model.”
*eyeroll*
Wal*Mart has been wonderful for those living in small towns who have seen their “old Down Towns” die off. I am from a small town with a vacant “old Down Town” and my family owns an independent store, and I have no beef with Wal-Mart. In fact, the MAJORITY of my non-housing spending is done at Wal*Mart each month. I couldn’t be happier about the influx of inexpensive foreign products at Wal*Mart.
The only people who hate Wal*Mart are leftists who adore what they believe the 1950s were like, when the world of sock-hops and friendly burger joints on every corner looked awfully nice on TV. (Of course this is before poor people had TVs, so it makes sense that life would look unimaginably pleasant!)
Eric,
That was Jeff’s point, I think.