Sunday, July 26, 2009

Well, whadda you know!

The feds are finally getting back to some serious antitrust enforcement. It's actually quite a modest start. By way of background (not related in the NYT story), the loosening of antitrust enforcement began many years before Bush II, with the slow turning away by the US Supreme Court from truly aggressive rulings favoring competition between businesses as the means to create a healthy climate for the marketplace. The "Chicago school" (based on Milton Friedman's concept of unrestrained capitalism) took over, the most salient disciple of which was Professor (now federal appellate judge) Richard Posner and influenced the course of judicial as well as administrative decision-making, creating the doctrine that consumers benefit more from economies and efficiencies of scale than from competition among equals. There began a long history of approvals of huge mergers that created "too big to fail" entities: not just banks but conglomerates that spanned many business arenas.

Well, maybe we've learned that "bigness is badness," to repeat an adage that used to dominate antitrust thinking. I hope so, because it has gotten so that entry into some low-investment businesses is becoming prohibitively costly, almost impossible. With high rentals of huge malls, massive chains of retailers and suppliers, how, really, could a small entrepreneur begin, for example, a sandwich shop or a burger joint? What about a carpeting outlet or a clothing stor?

As I said, a modest start, but a start toward once reducing the power of the monied and vested interests in America.

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