Microsoft and the Antitrust Debate: Or Broken Trust?

MOST economists support antitrust law because their theories teach that monopolies misallocate resources and reduce economic welfare. In addition, many economists share the view expressed by Sen. Orrin Hatch (R., Utah) in regard to the Microsoft case: that antitrust is a less dangerous antidote to the monopoly problem than, say, utility-style regulation. Thus, they accept antitrust as a reasonable governmental policy that occupies the middle ground between complete laissez-faire and a more “heavy-handed” regulatory apparatus.

But the reality is that antitrust’s basic theories are faulty or irrelevant and its alleged case evidence nonexistent. The reality is that private and political interests often drive antitrust enforcement and shape its final judgments.

DA

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D. T. Armentano

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MOST economists support antitrust law because their theories teach that monopolies misallocate resources and reduce economic welfare. In addition, many economists share the view expressed by Sen. Orrin Hatch (R., Utah) in regard to the Microsoft case: that antitrust is a less dangerous antidote to the monopoly problem than, say, utility-style regulation. Thus, they accept antitrust as a reasonable governmental policy that occupies the middle ground between complete laissez-faire and a more “heavy-handed” regulatory apparatus.

But the reality is that antitrust’s basic theories are faulty or irrelevant and its alleged case evidence nonexistent. The reality is that private and political interests often drive antitrust enforcement and shape its final judgments.