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@independent.org * www.independent.org