June 2, 1999 OPEN LETTER TO PRESIDENT CLINTON FROM 240 ECONOMISTS ON ANTITRUST PROTECTIONISM
Matthew Gaylor
freematt at coil.com
Sat Mar 3 18:59:38 PST 2001
Concerned about a growing number of antitrust cases instigated by
rival business firms, 240 distinguished economists signed an open
letter to President Clinton that called for an end to speculative
antitrust enforcement efforts. The ad, sponsored by The Independent
Institute, appeared in the June 2, 1999, editions of The Washington
Post and The New York Times.
AN OPEN LETTER TO PRESIDENT CLINTON FROM 240 ECONOMISTS
ON ANTITRUST
PROTECTIONISM
Dear President Clinton:
Antitrust is supposed to be
about protecting consumers against higher
prices and other
consequences of monopoly power. Accordingly, the
Justice
Department's Antitrust Division, the Federal Trade
Commission, and state
attorneys general are vested with authority to
defend competition and
protect the well-being of consumers.
The
current spate of heightened antitrust activism seems to suggest
that
anti-competitive business practices abound. Headline-grabbing
cases
against Microsoft, Intel, Cisco Systems, Visa and MasterCard,
along with a
flurry of merger investigations now under way, would
appear to demonstrate
the need for a vigorously enforced antitrust
policy that will create checks
and balances to eliminate consumer
harm.
However, consumers did not ask for these antitrust actions --
rival business
firms did. Consumers of high technology have enjoyed
falling prices,
expanding outputs, and a breathtaking array of new
products and
innovations. High technology markets are among the most
dynamic and
competitive in the world, and it is a tribute to open
markets and
entrepreneurial genius that American firms lead in so
many of these
industries. But, these same developments place heavy
pressures on rival
businesses, which must keep pace or lose their
competitive races. Rivals
can legitimately respond by improving
their own products or by lowering
prices. Increasingly, however,
some firms have sought to handicap their
rivals' races by turning to
government for protection.
Where antitrust authorities respond to
these protectionist demands, the
workings of markets are
short-circuited. Antitrust protectionism means
that market decisions
about how to compete for consumers' favor are
displaced by
bureaucratic and political decisions. More of the energies of
firms
are directed to politics, less to production and innovation.
Successful innovators are penalized, scale economies are lost,
and
competition is thwarted, not enhanced. Instead of preventing
prices from
rising, antitrust protectionism keeps prices from
falling.
Many of these cases are based on speculation about some
vaguely specified
consumer harm in some unspecified future, and many
of the proposed
interventions will weaken successful U.S. firms and
impede their
competitiveness abroad. The cost-benefit test for
antitrust has not been
met. We urge antitrust authorities to abandon
antitrust protectionism and
refrain from such speculative enterprises
when actual consumer harm cannot
be shown.
Donald L. Alexander
Western Michigan University
William R. Allen University of
California, Los Angeles
Lee J. Alston University of
Illinois
Ryan C. Amacher University of Texas, Arlington
Gary
M. Anderson California State University, Northridge
William
L. Anderson North Grenville College
D. T. Armentano
University of Hartford
George B. N. Ayittey American
University
Howard Baetjer, Jr. George Mason University
Charles
W. Baird California State University, Hayward
Ray Ball
University of Rochester
King Banaian St. Cloud State
University
William Barnett, II Loyola University
L. Dwayne
Barney Boise State University
Daniel K. Benjamin
Clemson University
James T. Bennett George Mason
University
Bruce L. Benson Florida State University
David E.
Bernstein George Mason University
Michael L. Bognanno
Temple University
Cecil E. Bohanon Ball State University
Ben
W. Bolch Rhodes College
Thomas E. Borcherding
Claremont Graduate University
Samuel Bostaph University of
Dallas
Donald J. Boudreaux Foundation for Economic
Education
Charles H. Breeden Marquette University
Andrzej
Brzeski University of California, Davis
Richard C. K.
Burdekin Claremont McKenna College
Henry N. Butler
University of Kansas
Colin D. Campbell Dartmouth College
Noel
D. Campbell North Georgia College & State University
Thomas
F. Cargill University of Nevada
Phillip P. Caruso
Western Michigan University
Ronald A. Cass Boston
University
Jeffrey R. Clark University of Tennessee
William
M. Clark University of Oklahoma
Carl P. Close The
Independent Institute
R. Morris Coats Nicholls State
University
John Cochran Metropolitan State College
Lloyd
R. Cohen George Mason University
Roy E. Cordato
Campbell University
Jim F. Couch University of North
Alabama
K. Chris Cox Nicholls State University
Eleanor D.
Craig University of Delaware
Robert G. Crawford Brigham
Young University
Jerry W. Dauterive Loyola University
David G.
Davies Duke University
Louis De Alessi University
of Miami
Arthur S. De Vany University of California,
Irvine
Michael E. DeBow Samford University
Henry G. Demmert
Santa Clara University
Matthew S. DePoint St. Cloud State
University
Arthur M. Diamond, Jr. University of Nebraska
Thomas J.
DiLorenzo Loyola College in Maryland
William R. Dougan
Clemson University
William M. Doyle, Jr. University of
Dallas
Michael Eames Santa Clara University
Robert B.
Ekelund, Jr. Auburn University
Jerome R. Ellig George
Mason University
Edward W. Erickson North Carolina State
University
Paul Evans Ohio State University
William P.
Field, Jr. Nicholls State University
Darren Filson
Claremont Graduate University
William A. Fischel Dartmouth
College
Arthur A. Fleisher, III Metropolitan State College
Fred E.
Foldvary Santa Clara University
Robert L. Formaini
University of Texas, Dallas
William J. Frazer University of
Florida
Lowell E. Gallaway Ohio University
Gary M. Galles
Pepperdine University
Roger W. Garrison Auburn
University
David E. R. Gay University of Arkansas
R. Richard
Geddes Fordham University
William D. Gerdes North
Dakota State University
Joseph A. Giacalone St. John's
University
Adam Gifford, Jr. California State University,
Northridge
Thomas W. Gilligan University of Southern
California
Micha Gisser University of New Mexico
Rodolfo
A. Gonzalez San Jose State University
Peter Gordon
University of Southern California
Richard L. Gordon
Pennsylvania State University
Gerald A. Gunderson Trinity
College
David D. Haddock Northwestern University
Simon Hakim
Temple University
J. Daniel Hammond Wake Forest
University
Steve H. Hanke Johns Hopkins University
Ronald
W. Hansen Univerity of Rochester
Scott E. Harrington
University of South Carolina
C. Lowell Harriss Columbia
University
Robert F. Hebert Auburn University
Frank L. Hefner
College of Charleston
Robert H. Heidt Indiana
University
David R. Henderson Hoover Institution
Robert S.
Herren North Dakota State University
Robert Higgs
The Independent Institute
Peter J. Hill Wheaton
College
George W. Hilton University of California, Los
Angeles
Randall G. Holcombe Florida State University
John B.
Horowitz Ball State University
Ronald A. Howard
Stanford University
Laurence R. Iannaccone Santa Clara
University
Gail A. Jensen Wayne State University
Dennis A.
Johnson University of South Dakota
Ronald N. Johnson
Montana State University
Benjamin Klein University of
California, Los Angeles
Daniel B. Klein Santa Clara
University
Alan E. Koczela George Mason University
Robert
Krol California State University, Northridge
Lawrence A.
Kudlow American Skandia Life Assurance Corp.
Timur Kuran
University of Southern California
David N. Laband Auburn
University
Deepak K. Lal University of California, Los
Angeles
Steven E. Landsburg University of Rochester
Don C.
Lavoie George Mason University
Robert A. Lawson
Capital University
Dwight R. Lee University of
Georgia
Gary D. Libecap University of Arizona
Wesley J.
Liebeler University of California, Los Angeles
Stan J.
Liebowitz University of Texas, Dallas
Anthony K. Lima
California State University, Hayward
Jody Lipford
Presbyterian College
Dennis E. Logue Dartmouth
College
Edward J. Lopez University of North Texas
John R.
Lott, Jr. University of Chicago
William R. Luckey
Christendom College
Hugh H. Macauley Clemson University
Paul
G. Mahoney University of Virginia
Michael T. Maloney
Clemson University
Yuri N. Maltsev Carthage College
Henry G.
Manne George Mason University
Stephen E. Margolis
North Carolina State University
Nelson Mark Ohio State
University
Michael L. Marlow California State Polytechnic
University
John G. Matsusaka University of Southern
California
Thomas H. Mayor University of Houston
Nolan
McCarty Columbia University
Fred S. McChesney
Cornell University
Deirdre N. McCloskey University of Iowa
Paul
W. McCracken University of Michigan
Thomas Means
San Jose State University
Roger E. Meiners University of
Texas, Arlington
David I. Meiselman Virginia Tech
University
Lloyd J. Mercer University of California, Santa
Barbara
Tracy C. Miller Grove City College
Jeffrey D. Milyo
Tufts University
Jeffrey A. Miron Boston University
William
C. Mitchell University of Oregon
Michael Montgomery
University of Maine
Carlisle E. Moody College of William &
Mary
Ronald L. Moomaw Oklahoma State University
Thomas Gale
Moore Hoover Institution
Andrew P. Morriss Case Western
Reserve University
Michael Valdez Moses Duke University
Craig M.
Newmark North Carolina State University
William A. Niskanen
Cato Institute
Lydia D. Ortega San Jose State
University
Dale Osborne University of Texas, Dallas
Evan
Osborne Wright State University
Allen M. Parkman
University of New Mexico
Ernest C. Pasour, Jr. North Carolina
State University
Judd W. Patton Bellevue University
Mark J.
Perry University of Michigan
Mary Bennett Peterson
General Motors Corporation
William H. Peterson Campbell
University
Owen R. Phillips University of Wyoming
Keith T.
Poole Carnegie Mellon University
Barry W. Poulson
University of Colorado
B. Michael Pritchett Brigham Young
University
Richard W. Rahn Novecon Corporation
David W.
Rasmussen Florida State University
George G. Reisman
Pepperdine University
Alan Reynolds Hudson
Institute
Morgan O. Reynolds Texas A & M University
Edward M.
Rice University of Washington
James R. Rinehart
Francis Marion University
Shawn Ritenour Southwest Baptist
University
Paul Craig Roberts Institute for Political
Economy
Jerry K. Rohacek University of Alaska
Charles K.
Rowley George Mason University
Randall R. Rucker
Montana State University
Roy J. Ruffin University of
Houston
Gerard G. Russo University of Hawaii
Kevin D. Sachs
University of Cincinnati
Joseph T. Salerno Pace
University
Michael T. Saliba Loyola University
David S.
Saurman San Jose State University
E. S. Savas
Baruch College, C.U.N.Y.
Thomas R. Saving Texas A & M
University
Lawrence J. Sechrest Sul Ross State University
Stephen
Sheppard Oberlin College
Stephen Shmanske California
State University, Hayward
William F. Shughart II University of
Mississippi
Olga Shvetsova Washington University
Barry N.
Siegel University of Oregon
Randy T. Simmons Utah
State University
Gene R. Simonson California State
University, Long Beach
Gene Smiley Marquette
University
Vernon L. Smith University of Arizona
Russell S.
Sobel West Virginia University
Lee C. Spector Ball
State University
Frank G. Steindl Oklahoma State
University
Paul B. Stephan University of Virginia
Houston H.
Stokes University of Illinois,Chicago
Courtenay C. Stone
Ball State University
Daniel Sutter University of
Oklahoma
Shirley V. Svorny California State University,
Northridge
Charles Swanson Temple University
Alexander T.
Tabarrok The Independent Institute
David J. Theroux The
Independent Institute
Clifford F. Thies Shenandoah
University
Henry Thompson Auburn University
Richard H.
Timberlake University of Georgia
Robert D. Tollison
University of Mississippi
Mark Toma University of
Kentucky
George W. Trivoli Jacksonville State
University
Gordon Tullock University of Arizona
Charlotte
Twight Boise State University
Michelle A. Vachris
Christopher Newport College
Karen I. Vaughn George Mason
University
Richard K. Vedder Ohio University
Harry C. Veryser
Walsh College
Richard E. Wagner George Mason
University
Deborah L. Walker Loyola University
Stephen J. K.
Walters Loyola University
Alan Rufus Waters California
State University, Fresno
Thayer Watkins San Jose State
University
Robert O. Welk Row Tek Economics
John T. Wenders
University of Idaho
Samuel C. Weston University of
Dallas
Harry White Boise State University
Lawrence H.
White University of Georgia
Richard W. Wilcke
University of Louisville
Thomas D. Willett Claremont Graduate
University
Arlington W. Williams Indiana University
Mary L.
Williams Widener University
Peter M. Williams
University of North Alabama
Walter E. Williams George Mason
University
Bruce Yandle Clemson University
DeVon L. Yoho
Ball State University
Ben T. Yu California State
University, Northridge
Thomas S. Zorn University of
Nebraska
Benjamin Zycher University of California, Los
Angeles
For further details, including information on the following
books and other
publications, please contact the Independent
Institute:
Winners, Losers & Microsoft: Competition and Antitrust in
High Technology
by Stan J. Liebowitz and Stephen E.
Margolis,
foreword by Jack Hirshleifer
Antitrust and Monopoly:
Anatomy of a Policy Failure
by D. T. Armentano,
foreword by Yale Brozen
The Causes and Consequences of Antitrust: The
Public-Choice Perspective
edited by Fred S. McChesney
and William F. Shughart II
The Independent
Institute
100 Swan Way, Oakland, CA 94621-1428
510-632-1366 * Fax
510-568-6040
info at independent.org * www.independent.org
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