An entertaining and enlightening take on the ebook antitrust case from the always thoughtful Holman Jenkins. “Because the 1890 Sherman Act is so sweeping and almost any business arrangement could be read as prohibited, courts understandably evolved a ‘rule of reason’ to distinguish the permissible from the impermissible. Unfortunately, the result has been antitrust as we know it: wild and fluctuating discretion masquerading as law. Retail price maintenance alone has been embraced and dumped so many times by the courts that it must feel like Jennifer Aniston.”
Competition In Action: Pizza Edition. And then there’s this: “Mr. Kumar said he was contemplating checking with a lawyer to see if there might be a city law that somehow prohibits a business from selling pizza at outlandishly cheap prices.” I’m afraid there probably is.
Competition In Action: Airline Edition. “In the last three decades, there have been 192 airline bankruptcies. Not coincidentally, fares, adjusted for inflation, are 18 percent lower than in 2000. Forty years ago, a majority of Americans had never taken an airplane trip. Now everyone is more free than ever to move about the country, air travel having been democratized by liberating it from government.”
Maybe you’ve heard this one. Socialized medicine makes an economy more competitive because businesses aren’t forced to pick up the tab for employee health benefits. Don Boudreaux responds.
“Week after week, [White House economic adviser Christina] Romer would march in with an estimate of the jobs all the investments in clean energy would produce; week after week, Obama would send her back to check the numbers. ‘I don’t get it,’ he’d say. ‘We make these large-scale investments in infrastructure. What do you mean, there are no jobs?’ But the numbers rarely budged.”
Concerning the 1890 Sherman Act and the courts’ subsequent “rule of reason”, shouldn’t the courts have handled it by declaring the act unconstitutional, if given the chance? How much does it take to realize that it is? Why couldn’t, or shouldn’t, it be declared unconstitutional today, if we had judges and justices of the right mind?
I’m a little confused on the Titanic article. Sure, they weren’t going to add anything more to the Titanic that they weren’t required by regulators, but the article doesn’t really do a very good job of demonstrating that, absent any regulatory requirements, they would have added the lifeboats anyway.
I think the key sentence is “Nobody seriously thought to second-guess the board’s judgment.” That reads to me like the owner knew he knew nothing about the correct number of lifeboats, and had decided to seek expert advice.
As it turns out he got some bad advice from the government, but perhaps in an alternative (more capitalist) history the only source of advice would have been the shipyard.
3 Comments to “Brain Food”
Concerning the 1890 Sherman Act and the courts’ subsequent “rule of reason”, shouldn’t the courts have handled it by declaring the act unconstitutional, if given the chance? How much does it take to realize that it is? Why couldn’t, or shouldn’t, it be declared unconstitutional today, if we had judges and justices of the right mind?
I’m a little confused on the Titanic article. Sure, they weren’t going to add anything more to the Titanic that they weren’t required by regulators, but the article doesn’t really do a very good job of demonstrating that, absent any regulatory requirements, they would have added the lifeboats anyway.
I think the key sentence is “Nobody seriously thought to second-guess the board’s judgment.” That reads to me like the owner knew he knew nothing about the correct number of lifeboats, and had decided to seek expert advice.
As it turns out he got some bad advice from the government, but perhaps in an alternative (more capitalist) history the only source of advice would have been the shipyard.