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Whatever Happened to Antitrust?
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One century ago today, May 15, 1911, the Supreme Court upheld the federal government’s lawsuit under the heretofore unused 1890 Sherman Anti-Trust Act against the Standard Oil near-monopoly in refining. The company founded in 1870 by John D. Rockefeller was broken up into 34 companies, including ones that eventually became Exxon and Mobil.
Of course, today they are back together again as ExxonMobil.
One of the less expected changes in public life over the last third of a century has been the growing apathy over the subject of antitrust (known outside of America as “competition law”). For example, the proposed merger of AT&T and T-Mobile, reducing the number of national cell phone network competitors from four to three, isn’t popular in the Senate, but it doesn’t seem to be a big news story with the public.

The last time I can recall anybody trying to make a big deal out of antitrust was in the mid-1990s when Pearl Jam, the most popular rock band of the period, sick of the absurd fees that Ticketmaster adds to concert ticket prices, tried to run a successful national tour without venues dominated by Ticketmaster.

Pearl Jam failed. People seemed to take away the message that, well, sure, Pearl Jam might have seemed cool and their crusade public-spirited. But their economic failure just shows that, deep down, they are losers. What’s really cool is having a monopoly.

It’s hard to explain to today’s youth what a big deal trust-busting was just a third of a century ago. Alternatively, it’s hard to figure out why nobody cares much anymore about cartelization.

When I was majoring in economics at Rice in the late 1970s, monopoly was a massive topic. I took a semester-long course devoted to propounding the emerging libertarian line that there was very little to worry about. Competition would tend to rapidly eliminate monopolies. This popular idea of businessmen getting together in smoke filled rooms to agree to keep prices up was a stereotype. I got a very good grade in that course. I believed. 
The young professor making these arguments against antitrust law in the late 1970s saw himself as a rebel against orthodoxy. Today, though, his free market ideas seems to have become conventional wisdom, or at least nobody cares that much to argue against them.
The funny thing was that when I got a job with a young company, however, it turned out that competition, from the perspective of owners and employees holding stock options, was awful. It’s like Adam Smith said, in a genuinely competitive market, it’s hard for a business to make more than the risk-adjusted cost of capital, which is not much fun at all. Why go through the immense amount of hard work to invent a new, better way of doing business if that’s all you’ll end up with? To make good money, the kind of money the stock market demands you make, you need some kind of quasi-monopolistic edge. 
The founder of the company, as strong a competitive personality as you could want, looked at the high fixed cost economics of this submarket of marketing research and quickly sold the firm to our chief competitor for a lot of money. But the Reagan Justice Department shot the deal down because our clients whined so much. That began a price war that quickly drove the third firm in the industry out of business, and kept the two survivors from making decent profits all through the prosperous ’90s. As I had jobs over time with both competitors, I came up with various novel ways to reduce competition, but top management, knowing the government was keeping an eye on them from their earlier merger attempt, was unenthusiastic. So, years of minimal profits rolled on.

This dreary fate did not befall most other industries, though. The Dow Jones average is about an order of magnitude higher than when I started to work in late 1982, because profits are vastly higher. It’s easy to understand the high profits of, say, Apple, but why does Procter & Gamble make so much off toothpaste and detergent these days?

One difference is that in the inflationary 1970s, it was common for members of the public to suspect that rising prices were caused by monopolistic practices. With the prices of manufactured goods stable or even falling in much of the time since the 1970s, however, it’s common to assume that anticompetitive activities can’t be a problem because, say, cell phones or TVs keep getting awesomer. Psychologically, it’s hard to worry much about whether prices should be falling even faster.

(Republished from iSteve by permission of author or representative)
• Category: Economics 
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  1. WesX [AKA "Wes"] says:

    Isn't it true that oil was at its cheapest during the height of the Standard Oil trust? I believe consumers were pretty happy. It was mainly competitors that agitated to break up the "monopoly" of Standard oil, not consumers.

    It was the daughter of one of Rockefeller's failed competitors, Ida Tarbell, that wrote the hit piece on Rockefeller.

  2. Anonymous • Disclaimer says:

    I think that a longer tracing out of the intellectual history of antitrust and anti-antitrust is in order. If you look back to the '70s, government regulations forbidding entry into things like transportation were the big problem. Energy, long-distance telecoms, and banking had similar regulatory regimes. Antitrust and regulation were used to keep competition out. Even through the '90s, antitrust was a major tool used by unsuccessful firms to beat up on their competition, e.g. Apple vs. Microsoft.

    Loosening up on antitrust did lead to huge social benefits. Looking at the distribution of market power vs. market share did turn out to be the right way to go–are firms like XOM Cournot or Bertrand competitors or whatever. The scaling back of antitrust has NOT led to a big increase in the share of national income going to capital, so on that front I'm not worried.

    By the '90s, most of the low hanging fruit was gone. The new regulatory regime in local land line telecommunications was a total mess, since there is in fact a natural monopoly there. Local electricity regulation was bungled in places like California. I think that we've seen the last big wave of anti-antitrust and deregulation for quite a while.


  3. Have you read "confessions of a monopolist" by frederic c howe? Anti-trust was *always* a scam. For Pete's sake, banks helped promote propaganda that the Federal Reserve system would actually hurt the bankers. See how that turned out.

  4. But the Reagan Justice Department shot the deal down because our clients whines so much.

    Psychologically, it's hard to worry much about whether

    Did you write this late at night? It needs a copy edit.

  5. Anonymous • Disclaimer says:

    One item that has at least a psychological impact–old-fashioned, obvious monopolies are a lot rarer.

    You used to have "natural monopolies"–goods or services that, in a given area, would only have one supplier. Landline phones, cable TV, electricity, natural gas. (If you were mad at the gas utility, you could switch to an oil burner, but that meant a new furnace). Trash pickup used to be either govt run, or one citywide contract. Those days are gone–you can change power companies, you can play the phone company and the cable company and maybe a satellite company off against each other for your TV/internet/landline-phone service. Two different trash companies service my block.

    The only thing that I can think of that looks like old-school monopolies are Microsoft Windows and Office, and Apple's iTunes. And Microsoft never really recovered from the antitrust suit in the 1990s–if they had, there probably wouldn't be a whole industry of different antivirus/ antispyware/ etc companies. They would have also taken a run at devouring Google and Adobe's markets.

    Antitrust law still exists, mostly as a weapon in complex negotiations. The NFLPA is using it against the NFL in their lockout, and there will come a day when the music companies use it against Apple.

    –Anonymous Coward

  6. Steve,
    It's interesting to look at other countries that have multiple quasi-monopolies and still manage to produce better technology than we do. Heck, AT&T was a monopoloy that gave America the best telecom technology in the world before deregulation in the 70s and 80s.

    I think monopolies under a State Capitalist system can be very beneficial if they are properly regulated and are required to constantly reinvest in R&D. The free-market economists' prediction that unlimited compettion would lead to a technological utopia has turned out to be quite wrong.

  7. Antitrust is alive and well. It's one of the federal government's best extortion schemes:

    – Congress passes a short, vague, open-ended enabling law that could mean almost anything.

    – The federal bureaucracy swings into action, adopting equally vague standards and a body to continually change them & interpret & enforce them.

    – Even with the help of lawyers, no business can be sure whether its strategic transactions are in compliance or not … until the FTC tells them so.

    – I.e., the sovereign has made an end-run around the rule of law by adopting "laws" that effectively give the sovereign complete discretion in deciding what's against the law.

  8. Maybe people aren't up in arms about AT&t-T-Mobile because they look at their bills and realize that 20% or so is due to taxes and government induced surcharges. Then they decide that there's a monopoly much bigger and more powerful than any corporation that they have to worry about.


  9. Thomas Frank wrote a WSJ column on this last year and suggested a book…

    Barry C. Lynn's recent book, "Cornered: The New Monopoly Capitalism and the Economics of Destruction," has about it the feel of a secret history. It arises directly from the old antitrust tradition, and it presents us with an amazing catalogue of present-day monopolies, oligopolies and economic combinations. Its subjects are, by definition, some of the largest and most powerful organizations in the world. And yet almost none of it was familiar to me.

  10. I'm still mad about the Bell System divestiture (which coincidentlly, I just mentioned to my husband the other day).

    Until then, phone service was both cheap and reliable. Now it's not.

    I realize it's not the fault of the divestiture that I can't find the Mute button on my new cell phone but the convoluted comparison shopping one must do to get a decent cell phone plan certainly is.

  11. Anonymous • Disclaimer says:

    After the government broke up ATT and broke Bell Labs in the process? Who wants antitrust?

    Well, it would be nice if 'too big to fail' meant 'you just volunteered for antitrust breakups' rather than government doing its usual bad job of picking winners while the losers do their usual good job of picking governments.

  12. Steve: "The Dow Jones average is about an order of magnitude higher than when I started to work in late 1982"

    When you take inflation into account, allow for the fact that the Dow dumps less successful companies for the new winners, and that 1982 was the start of a boom, this ten-fold increase is less than meets the eye.

    Still, your main point is well-taken. Cell phone rates are particularly gougesome. $50 per phone per month!

  13. "the emerging libertarian line that there was very little to worry about. Competition would tend to rapidly eliminate monopolies."

    Libertarians have a childish attitude to human nature. Given the opportunity monopolies will simply capture the regulators and use them to kill off competition or prevent it developing. That's what lobbyists and regulations are for.


  14. While I'm far from being an expert on anti-trust law, from what I've read in the Wall Street Journal editorial section, Congress has been unable to craft a law that makes it obvious as to what's a monopoly and what's not under the law.

    You're reduced to the "I know it when I see it" maxim that Supreme Court Justice Potter Stewart said about obscenity. That makes the application of the law more political than strictly judicial.

    I'm very leery of laws like that.

  15. Good article.

  16. Svigor says: • Website

    Psychologically, it's hard to worry much about whether

    A Procter & Gamble suit must've gone down into the bunker and hit the kill switch.

    I remember when I was attending a Catholic school, they had a guest speaker and pulled all of us into the cafeteria to listen. He have us a long spiel and slide show about the media degrading our culture, and how Satanists ran Procter & Gamble. The Catholic girls all het up when I suggested the guy was a bit nutty.

  17. I wonder what role the breakup of Ma Bell had in the explosion of telephony services starting in the late 1980s.

    Then again, Bell Labs gave us much of the underlying code for modern network computing — including the Internet — so big monopolies with huge reserves of money to devote to basic research can be a good thing.

    I do know two things — I'll miss that T-Mobile girl and I'm far more worried by Microsoft's buyout of Skype.

  18. Anonymous • Disclaimer says:

    Interesting how businesses want to defend monopolistic practices.

    Yet, turn it around and unionize workers or prevent businesses from leaving the country to find workers who can live on lower wages and look what happens.

    I won't even get into how the monopolies or monopoly (depending on your perspective) that comprise our 2 valid political parties fail to meet the needs of the citizens of this country.

  19. Mergers definitely haven't improved service in the airline and pharmaceutical industries.

  20. Anonymous • Disclaimer says:

    Uh, the Chicago school developed economically-rigorous metrics for evaluating market share. That's what happened. Anti-trust law before 1980 wasn't a paradise; it was an anti-scientific joke. Judges allowed what they liked and punished what they didn't like, without any analysis of whether the activity entailed deadweight loss or was more anti-competitive than the alternative.

  21. Cartel !+ monopoly…ugh.

  22. In Israel they just licensed a fourth national cellular carrier to increase competition – this in a nation of 7.5 million.

  23. Anonymous • Disclaimer says:

    "With the prices of manufactured goods stable or even falling in much of the time since the 1970s, however, it's common to assume that anticompetitive activities can't be a problem because, say, cell phones or TVs keep getting awesomer."

    Yes, the entire point of antitrust law is to improve the public interest. If prices are going down, quality is going up, or both, there's no problem to solve – except for the competitors who can't produce things so cheaply. They love to use antitrust law as a sword where they'd lose in free competition.

    Why the nostalgia for this?

  24. Anonymous • Disclaimer says:

    One thing to remember was that the DOJ's antitrust division's lawyers in the "Golden Age of Antitrust" spent a lot of their time chasing down penny-ante stuff. For example, as late as the 1970s or even early 1980s, it was pretty commonplace in Anytown USA to be able to find the local gas station owners meeting each week after lunch at the Rotary Club, casually fixing the price of unleaded among themselves. It didn't even occur to some of them that it was actually illegal. Repeat that scenario among druggists, grocers, etc. spread out around thousands of towns, and you can see there was plenty of work for a young government attorney.

    After around 1980 that became much harder for a lot of connected reasons. Improved networked communications made it a lot easier for head offices to issue pricing orders to franchisees and even ostensibly "independently-owned" shops. A gas station manager, say, just no longer had as much leeway to set the price of juice based on observed supply and demand conditions at the end of the chain.

    The HBD angle is, of course, that all three or four of Anytown's gas station managers in 1981 would all have been in the same social class, all probably white, and all moved in the same social circles. Those same stations in 2011 are just as likely to be run by a Gujarati, a Croat, a Mexican, and so on. These guys never meet socially at Rotary clubs, so they have fewer opportunities (or motivations) to collude.

  25. Dufu says:

    Don't forget the Microsoft witch hunt. It might not have had the popular appeal of Pearl Jam, but does anyone else recall just how atrocious Internet Explorer was back then? After Netscape was gone I really got behind that suit.

    Of course, it was really just about the Clinton administration punishing Gates for not playing the DC influence game. Once the donations started flowing DOJ seemed to forget about it pretty quickly.

  26. >Isn't it true that oil was at its cheapest during the height of the Standard Oil trust?

    Yes. Rockefeller had a number of efficiency edges (transport oil in railroad containers, not barrels) and was able to pressure his suppliers (secret railroad kickbacks). Essentially, he was the Wal-Mart of oil- the consumers win big, he wins big, everyone else loses.

  27. Er, that should have been "rebates", not "kickbacks."

  28. Anonymous • Disclaimer says: • Website

    Keep in mind that most monopolies today exist because of government regulation, not in spite of.

    Would the major phone services and ISPs be monopolies if not for government restrictions on opening new ISPs, constructing telephone and cable lines, and what providers can access certain radio waves?

    The answer is probably not.

  29. Anonymous • Disclaimer says:

    Yes, it can be very hard to tell apart industries with high fixed costs but reasonably high competition from cases where real market power exists and prices have been set at excessive levels. This is why modern economists prefer the "contestible market" view, such that, in the absence of barriers to entry, prices are high enough to defray all fixed costs, but not substantially higher, or else new competitors will enter the market and force prices down.

    The possiblity of bankruptcy yields a further complication: a bankrupt firm which successfully reorganizes has essentially shed all fixed costs onto its creditors, and can now force prices even lower than they would otherwise be.

  30. I think most economists accept that many industries are characterized by ‘monopolistic competition’ of one sort or another. Crudely put, major firms have a degree of monopoly power over some products in the short run, but face competitive pricing over the longer haul and do not, on average, earn monopoly returns. And this may be about the best we can practically do. Efficient production of many goods simply requires scale and expectation of continued profitability that are inconsistent with vigorous price competition in the very short run. And the attempt to secure temporary monopolies spurs the innovation that prevents stagnant production methods or stagnant technology. Paradoxically, allowing a little monopoly for a little while secures the big advantages of competition: constant improvement at reasonable pricing and profits, over the whole product lifecycle. That is also the logic of patent law.

    Certainly, we appear to have done better by not obsessing about small and temporary monopoly power. American industry has generated more new products and higher productivity gains under a regulatory regime that looks only for major and enduring concentration problems than it did under the old, 70s-style regime. Much of antitrust litigation in the old days was in fact generated not by representative of consumer interest, but by business rivals seeking to preserve their own interests.

  31. Anonymous • Disclaimer says:

    With the prices of manufactured goods stable or even falling in much of the time since the 1970s, however, it's common to assume that anticompetitive activities can't be a problem because, say, cell phones or TVs keep getting awesomer.

    Steve, if you consider the economics of vital statistics, the cost of reproduction for the middle class has gone up by 4X or so over the past 50 years. Which is why the middle class is disappearing.:

    The cost of the 2 major debt-service items, the two big ticket necessities i.e. a 3 bedroom house and car, has gone up around 20X over the past 50 years. So the debt-service load in a family household has gone up nearly a factor of 20 in the last 50 years.

    While household income has gone up only about 70% as much as the essential household debt service in the last 50 years.

    But that “household” in 1954 was one income and the income was relatively stable—the woman stayed at home and raised the kids.

  32. The Supreme Court has undermined anti-monopoly laws by making them impossible to enforce.

  33. "it's hard to figure out why nobody cares much anymore about cartelization."

    Do the major news media and entertainment businesses now qualify as cartels? If so, there's your answer.

    It makes sense for independent newspapers to crusade against cartels. For conglomerate-owned papers, not so much.

  34. Here's the link from my previous comment regarding the rise in the cost of reproduction for the middle class. It doesn't appear to show up properly in the original comment:

    Rise in Cost of Reproduction

  35. One of my fave economists is Wilhelm Ropke, who managed to be both "Austrian" (ie., generally very free-market) and determinedly "let's bust up monopolies."


  36. Monopolies create the "too big to fail" phenomenon and we know how that has worked out.

  37. SFG says:

    "The funny thing was that when I got a job with a young company, however, it turned out that competition, from the perspective of owners and employees holding stock options, was awful."

    Of course! Why would we want to structure the economy to benefit owners, rather than consumers? There are more consumers.

    I don't see anything un-conservative about making the market serve society, rather than the other way around. Certainly it's not un-Christian.

  38. Anonymous • Disclaimer says:

    I remember the Capitol Hill hearings on the monopolistic practices of Microsoft. Testifying against the too rich Bill Gates were Scott McNealy (the highest paid man in California) of Sun Micro and Larry Ellison of Oracle. It was a lover's spat among the billionaires.

    Microsoft was late getting aboard the Internet juggernaut but once it offered its browser solution it was too dominant for the likes of Netscape, Oracle, and Sun. At those hearings we were told there was no possible cure or remedy. Without immediate government action Microsoft would drive every other competitor from the marketplace.

    They forgot that man is mortal. Microsoft will probably never recover from Gates' retirement. Today they look like an old tired corporation – hardly a threat to innovation.

    BTW Sun is also old and tired. The whole idea of having a "workstation" rather than just a PC is quaint. Similarly when I first taught Oracle it was a pioneer against the old tired IBM network DBMS technology. Now Oracle is the establishment and is ready to be overthrown.

    The reason monopoly destruction is not much of an issue anymore is that at least for the most public of industries it is not needed. Google looks unbeatable today – give it a few years. They too will stumble and crumble.


  39. the continued improvements in technology do help mask the increasing power of monopolies, but another aspect of this is the increased spread of propaganda. Man is a creature based on the spread of ideas. We evolved to be able to conceive, propagate and implement complex plans and strategies. That was our competitive advantage on the veldt 200kyears ago. The tribe has to very quickly go on the same page when the leaders disseminated a plan to do something–hunt a herd of antelope, defend the village, etc. Thus mankind is inherently susceptible to propaganda from mass media networks, networks that have a culture that has been molded by the rich and powerful for decades.

    Not surprisingly, the rich and powerful like monopolies. Thus, the media likes monopolies.

    The pervasive spread of mass media (which carries the ideas of the rich and powerful) is a large factor in the dearth of anti-monopoly public sentiment.

  40. If you take the tax-free merger exemptions and the dividends received deduction out of the Internal Revenue Code, you won't have to worry about antitrust.

  41. Ask the Wall Street, Big Media, Big Government, Big Academia, and Big Military complex.

  42. Jewish Power is based on 'trust' among various institutions of Jewish power(across many industries). Anti-trust is anti-octopus-ism, and Jews of the NWO won't like that.

  43. If the Jewish elites go after Big Oil, people will then wonder… what about Big Money, Big Hollywood, Big Tech, etc. So, there's a wink-wink understanding between Big Oil and Big Money. Besides, Jews also have a huge stake in Big Oil.

  44. Anonymous • Disclaimer says:

    "The Dow Jones average is about an order of magnitude higher than when I started to work in late 1982, because profits are vastly higher."

    Actually, profits of the S&P500 as a share of GDP are smaller now than in the 1970s. So yes, profits are higher, but it's mostly because of inflation and economic growth.

    She Robert Shiller's web page for data:

  45. Steve, a couple of things. First, the WSJ is predicting the end of falling prices and rising prices as China runs out of young workers and MUST pay them more to simply make things. Coupled with a desire to create internal consumption for growth (export-led growth is not sustainable, even the Chinese know that selling the US cheap sneakers and Ipods is not the way to wealth) means inevitably rapidly rising prices for consumer goods (also fueled in part by cheap dollar/rising commodity prices which are systemic).

    Secondly, Procter and Gamble are not making much money. The WSJ again reports their earnings and margins are down over the decade.

  46. Yes that Jewish Elite Teddy Roosevelt went after Big Oil (John D. Rockefeller) in a big way. Please.

    Microsoft was not a very efficient monopoly. Because computers are not toasters or other unchanging appliances. Gates ran into trouble around 1997 for two reasons. One, the architecture of MS OS was crap, designed to push performance out of limited late 70's – early 80's hardware, and for legacy reasons had to be kept around (for critical business customers building apps on top of it). Second, Gates ran out of the right kind of people: motivated, smart, competitive. His stock price started to tank in the late 90's as growth slowed, and then Sarbox killed options as a cheap way to pay them. The best went elsewhere: Apple, Google, etc.

  47. Let me add, MS and other companies are primarily engineering firms (that's what software really is) not something like say, a vertically integrated oil company where massive capital is critical. For engineering firms, having the best/smartest/most talented engineers matters. Particularly as switching has become easier and easier.

    The smartphone/tablet wars will hinge on who successfully uses the most smart people: Apple, or Google, or Research in Motion, or Nokia, or MS, or Samsung. The explosion of bandwidth hungry apps means heavy use of compression tech to avoid massive bandwidth charges, and is likely the big advantage that the companies will fight over.

  48. Anonymous • Disclaimer says:

    "With the prices of manufactured goods stable or even falling in much of the time since the 1970s, however, it's common to assume that anticompetitive activities can't be a problem because, say, cell phones or TVs keep getting awesomer. Psychologically, it's hard to worry much about whether prices should be falling even faster."

    This isn't exactly true about products getting "awesomer". Just as people in the 70's may have ignored inflation as the culprit for rising prices, you are ignoring changes in technology making newer, yet not necessarily better, made TVs and cellphones equipped for the new technology, mp3s or 4G or whatever. That companies would focus on retrofitting an older, well-made model of anything with the new technology would be the ultimate breakthrough.

    Not impressed with your pro-business meanderings, Sailer. That or the fact that some not-too-bright hags with not much other than the ability to be good secretaries seem to be running your blog these days.

  49. So, did you go to business school? I don't recall. Anyway, a cartel is not a monopoly. Happy to help.


  50. Wes is absolutely right. Petroleum products were cheaper than either before or after, due to efforts of Rockefeller.

    One could make a strong case that Rockefeller was the driving force behind the modern, highly efficient processing industries, especially chemical, whether oil-related or not. Continuous-process, in-process instrumentation, and automation
    of virtually every phase of every process were all features (and became necesary features even of all those wishing to compete. "Bigness" was simply a comcomitant feature of a relentless drive to reduce, through capital investment in system improvements, every cost associated with a given process or product.

    Rockefeller didn't play by the same rules as exist today–but then, neither did anyone else. Congressmen were for sale in those days (how much has that changed?) and it wouldn't surprise me that he pursued "quantity pricing" on that commodity as well as others.

    There's no way to prove what the "shape of the future" might've been without JDR but a reasonable surmise would be that the U.S. (and world) economy would have been more primitive without him than has been the case since.

  51. Jersey Guy:

    I'd be interestted in knowing which "free-market economists" believe (or have predicted) that an absence of any regulation would lead to a "technological utopia." In my experience (as a free-merket economist–strictly the "armchair" sort) we believe it's a practical slam-dunk that, without regulation of other than criminal conduct, consumers will get more of whatever they want and at lower prices. Government isn't especially adept at determining what products and services the public wants and at what prices; never has been and never will be. At best, they can only get lucky (and, when they don't, everyone suffers).

    The real business of government is employing force (the very opposite of pleasing the consumer). Being forced to buy products of a monopolistic producer is anathema to most folks, whatever their station in life. Tyranny occurs in many forms and the limitation of sellers to those with one sort of government approval or another is just one among many of those forms.

  52. Kylie:

    Actually (in light of your usual
    well-considered comments), I find it astonishing that you'd prefer the "old" Bell system of years ago to modern telephony (and, especially, that you'd think the older regime "cheap"). My guess is that, in years gone by, your major phone use was simply the usual
    flat-rate, unlimited local calling (in which case the current equivalent is only slightly higher, I believe).

    I've been self-employed for over 40years in a business very heavily reliant on phone communication. Formerly, my monthly bills were rarely under $250 and, far more frequently, were in the $4-500 neighborhood.

    To compare is astonishing. I actually us the phone far more now than formerly–never even have to think about (from cost standpoint) whether I should make a particular call or not. I have unlimited service over the U.S. and Canada (including Alaska, Hawaii, and Puerto Rico), run a fax machine off the same phone number, and yet pay a grand total of only $99 and change. But it gets even better!
    That $99 is inclusive of hi-speed internet (DSL) service, which itself includes a sometimes-very-valuable service where I can call
    their "technical service" and get help with problems that arise from time to time–where a helpful guy or gal located in Pennsylvania, Texas, India, or the Philipines "talks me through" the problem, whatever it might be–very patiently (and never, ever, telling me that "it's not our problem"). Not only that, Kylie, but there are even cheaper alternatives on offer (like Magic Jack or vonage, etc.). But I don't bite–just can't see how I could do much better (even if the offered service were FREE!).

  53. Jersey Guy: "AT&T was a monopoloy that gave America the best telecom technology in the world before deregulation in the 70s and 80s."

    You obviously never had a rotary phone.

  54. Luke Lea:

    You're old enough (as am I) to remember when the only cell phones were the ones worn by Dick Tracy and associates on their wrists. And those only enabled one to talk and listen–not to take pictures, retrieve email, send text messages, buy products, etc., etc.

    And you think $50/month is "high" for such utility and convenience?

  55. Wandrin:

    You're (more or less) talking out of both sides of your mouth.

    You criticize libertarians who recommend reducing or eliminating regulation, calling 'em "childish."

    Bt you then complain that the monopolies will " capture the regulators." Which is it? If there are no regulations (as proposed by most libertarians), WHAT will the monopolies "capture?"

    Some of the commenters here have remarked (and I wouldn't doubt that you are among those who've observed the same) that many, if not most, of the monopolies with which we have most frequent contact are those actually created by (or dependent on) government for their existence. "Natural" monpolies are actually the rare exception, rather than the rule (as there are few naturally-occurring resources limited to only one location or source). But even a true monopoly does not enable its owner to disadvantage the consumer willy-nilly. In the first place, there are few things for which there is no known substitute and for which there will not, in fact occur substitution on the market, given a price "too high." Remember also that mere monopoly–control over the entire supply–is insufficient
    for its owner to achieve "monopoly
    price," i.e., a price at which he can sell a smaller quantity for the same profit for which he would have had to sell a larger quantity absent the monopoly of supply. (Without such "monopoly price," it's difficult to identify any way in which the consuming public is disadvantaged).

  56. Svigor:

    I remeber something of the same sort occurring several times over the years. I think the "Satanist" accusation was focused on some aspect of the corporate logo being such (Satanist) but I don't remember particulars.

    The gals to whom you referred are just the types that made THE DA VINCI CODE such a runaway bestseller and constitute an ever-reliable TV audience for anything having to do with Nostradamus.

    As ol' Ron White has observed drily (on more than one occasion), "You can't fix stupid!"

  57. SFG:

    You are correctly inclined but haven't made the logical inference.
    Market, civilization, and society are "coterminous"; they are merely different words for the very same thing: people working together–as individuals–to satisfy their many individual needs as cheaply as possible, all with a minimum of antagonism or conflict.

  58. randy:

    You must live somewhere different. I'm pushin' 75 and in all those years, I don't think I've ever noticed any "dearth of public opposition to monopoly." As a matter of fact, I know of almost no monopolies except those which have been created by government action, such as the radio and TV frequencies, public utilities, etc. The only actual monopoly of supply of which I'm currently aware (now that DeBeers diamond position is essentially shot) is the monopoly of the rare-earth metal scandium, a critical resource whose entire supply is controlled by a mysterious Brit (who lives in Portugal) named Tim Worstall. Due to his machinations, this supply, vitally necessary for manufacture of the newer, soon-to-be-mandatory lamp bulbs, is locked up tighter than a drum. The amazing thing is that nobody seems inclined to contest his supremacy in this market.

  59. The Supreme Court has undermined anti-monopoly laws by making them impossible to enforce.

    True, inevitably Congress will have to go to the tax code to regulate monopolies. This Econ paper has the right idea.
    This paper addresses the reduction of market failure under imperfect competition. It proposes a tax scheme that provides firms with an incentive to forgo their market power… Welfare for society increases since firms with market power choose a lower price and produce a quantity closer or equal to social optimum…

  60. "Anti-trust" always seemed to be combination of extortion (or just arbitrary exercise of power) on the part of the Feds and anonymous tips to the secret police on the part of competitors.

    I certainly trust the Justice Department less than I trust any Fortune 500 company. Not to say that I trust either group a great deal, but the cure seems worse than the disease.

    I would trust the Feds a lot more if they would show some competence and enthusiasm in performing the functions which they are actually supposed to do.

    "Anti-trust" is another of the awful ideas that gained credence in the 1890's.

  61. "His stock price started to tank in the late 90's as growth slowed, and then Sarbox killed options as a cheap way to pay them. The best went elsewhere: Apple, Google, etc."

    Gates is on record as resenting having had to pay employees via stock options. Microsoft peaked as a company in the late 90s because, no matter how much bigger it got, there was no chance its profits or market value were going to increase again tenfold, diminishing – for them – the value of stock options relative to cash compensation. Potential new employees found the options better at startups. There is also very little incentive – actually, none – to go work for a stodgy, "old" corporation like Microsoft and collect a paycheck when you're own business idea could make you a billionaire.

    I can remember when Microsoft was first on every computer science major's choice of employer after graduation. For a decade or so it was Google, and today it's probably Facebook. Facebook has 5 more years, tops, of attracting the best talent before the inevitable decline.

    Incidentally, the last version of Visual Studio I purchased (which took a million years to install) cycled between three pictures of hardworking programmers during installation. Every single one of them was Asian.

  62. Jody says:

    uh i think we recently went through a case of this only 12 years ago or so, when microsoft made it impossible to uninstall internet explorer from windows. they had to be forced by law to allow that as an option.

    not sure which version of internet exploder that was, but it was in the windows 98/windows 2000 era.

  63. "Whatever happened to antitrust?"

    1) It's still around just inactive.

    2) Why is it inactive? It took long enough but it did its job.

    Every major corporation is now far closer to being a partner to government than a rival. Step out of line and antitrust is still there (for the Microsofts of the world) but play ball and you'll get all sorts of goodies in the form of either straight up cash or competition strangling regulation.

  64. Gene Berman,

    "You criticize libertarians who recommend reducing or eliminating regulation, calling 'em "childish.""

    Straw man. You lose.

    "that many, if not most, of the monopolies with which we have most frequent contact are those actually created by (or dependent on) government for their existence."

    Sure, but lobbied for monopolies, like the federal reserve, are just another form of regulatory capture.

    "(Without such "monopoly price," it's difficult to identify any way in which the consuming public is disadvantaged)."

    Monopolies (or cartels) seek to prevent competitors coming into the market. The logical end-point of monopolization, cartelization, corporatism or whatever you want to call it is stagnation. There's gotta be some opportunity costs in that.

    In a nutshell, free competition is in the interests of consumers but not producers. Most people are both.

    If production and consumption was divided into 12 sectors and each person was a producer in 1 and a consumer in all 12 then on balance it is in all their interests to want free competition. The loss in benefit from being part of a producer monopoly is outweighed from the gains of not paying monopoly prices for the other 11.

    There's a cheater niche if one sector is monopolised while the others aren't but it's worse for everyone if everyone cheats.

    However there's a second cheater niche. If all 12 sectors are production monopolies then the people at the very top of each can earn much more from that position than they have to pay out in extra costs.

    It's human nature to follow interest. I agree there should be as little regulation as possible – especially as a lot of it is lobbied for to make it harder for new competition – but enforcing a free market is part of neccessary regulation.

    If you don't enforce it you won't have a free market for long.


  65. I like Holman Jenkins' columns in the WSJ because he's a rare bird: he's openly pro-business rather than nominally pro-competition. So, instead of writing about how cartels couldn't happen in the free market, he writes columns about how good it is that, say, international shipping firms get together in international waters and set prices in an apparently legal cartel. If they couldn't collude, they wouldn't make much money, so God bless and protect the international shipping cartel!

  66. "Now Oracle is the establishment and is ready to be overthrown."

    yeah but larry and oracle still won their most recent US lawsuit against ze germans at SAP. and oracle is still worth twice as much as SAP. so they're still doing very good, for now.

  67. "If the Jewish elites go after Big Oil"

    that's not just a jewish thing but something all america liberals do at the national level of politics. but yeah, energy is extremely unjewish and ashkenazi jews have very little to do with it, one of the reasons i cringe a bit when the "jews control everything!" discussions start, or the "jews invented everything and we would all be in caves banging rocks without jews!" posters show up.

    they have no control over the biggest, most important industry on earth, and that bothers them whenever energy becomes an important topic. but it bothers all US liberals to about the same degree, not just the jewish ones.

  68. Does antitrust apply to Vdare? Peter Brimelow seems to personally profit from the lion's share of donations.

  69. "but yeah, energy is extremely unjewish and ashkenazi jews have very little to do with it"

    Meet Ken Cohen, Exxon's point man in charge of defending the company against attacks by politicians and the MSM.

  70. Anonymous • Disclaimer says:

    Close to half of corporate profits now go to the financial sector, which may tell you something about the lack of efficient markets and competition for America's biggest welfare queens. If economic science wasn't just an ever changing excuse to shift income upwards then profits would tend toward zero for the benefit of workers and consumers.

  71. "Meet Ken Cohen, Exxon's point man in charge of defending the company against attacks by politicians and the MSM."

    i'm familiar with him. so a PR guy they hired is now "evidence" that jews control oil? there are few jews in the engineering and geology, and none of the oil profits go to jews, but to "evil", frumpy looking gross old white guys, who must be universally considered OK targets to hate. how dare they take market risks. no way should THEY be allowed to make 20 billion a year, running a huge, super complicated mining operation that almost no other groups in the world could handle (if they could, they'd be making 20 billion a year too doing difficult, non-conventional oil operations).

    ken cohen is a lawyer. he has nothing to do with the oil industry. i'd say he actually does a terrible job of PR, considering nothing he ever says or does makes liberals understand the oil industry nor does it stop them from flying into a reflexive rage against exxon specifically whenever the price of oil goes up "too much" (liberals now seem to be the judge of when something costs too much or when somebody's salary is too high).

    in 2008 the liberals dragged the US oil companies into congress. in 2011 they did the same thing. what did ken cohen do between 2008 and 2011 to help liberals understand this topic? to make them not ask the same stupid questions over and over? the price of oil will go up again in 2012 or 2013 and the liberals will drag these executives into congress yet again. what will ken cohen have done by that time? anything?

    like various key financial positions, which now seem to be permanently reserved for jews, and jews only, competence does not appear to be a factor most of the time in "which jewish lawyer do we hire to do the talking for us?" the next chairman of the federal reserve will also be a barely capable jewish guy, but he'll be jewish, which is by far the most important thing. kind like how the NFL has established an artificial monopoly for africans, which is a whole 'nother topic for a lawsuit. 34 corners drafted in 2011, 34 out of 34 of them african. not 1 guy from any other group on earth can even, by statistical chance, have a single guy that can play corner? not just this year, but year after year after year?

    the engineers and geologists employed in the energy industry don't get to live in a lawyer's artificial world. they are restricted by physics and held to standards of technical competence and economic reality. if they don't do a good job they get fired and the company loses money.

  72. here is a good example of ken cohen's abilities (or lack thereof). a conference call with a chemical engineer, rob rapier.

    although he does eventually get around to what is, by far, the most important number:

    "So this is a very tough business. It is a low-margin business. We made – in 2010, on average, we were keeping about 3 cents a gallon, comparing – that is, that returned to ExxonMobil from the sale of a gallon of gasoline, whereas the federal government by statute was keeping 18.4 cents a gallon on every gallon sold."

    which is the FIRST thing they should ALWAYS remind liberal politicians about whenever liberals start getting the idea to attack the oil companies.

    the US government just sits there doing nothing, no hard work, no specialized labor or intellectual property or engineering designs, taking no risk, and simply takes the money from the oil companies – more money than the oil companies themselves get to make from their OWN work.

    exxon made "too much" money from oil? then how much money did the US government make on it? and by sitting there doing nothing, too.

  73. Anonymous • Disclaimer says:

    The cure for large moribund companies is startups.

    The reason people don't care about antitrust is that we've just been through a decade or so period where guys started in a garage to ultimately overturn every retail store (Amazon), to replace every personal ad and newspaper (Google), to reinvent local commerce (Groupon), etc. etc.

    You don't need the government and some idiot political process that decides company A is a monopoly while company B is "too big to fail".

    You just need startups and low regulations to allow those startups to get started without tons of capital.

  74. Anonymous • Disclaimer says:

    Steve and some commenters recently have been on a kind of so-right-it's-left kick with respect to economics, flirting with the idea of increasing regulations and taxes on Obama's "millionaires"… but perhaps not thinking about the fact that (a) "millionaires" are a stalking horse for "whites" and (b) said taxes would go to the insane government that oppresses us all, to be dumped in the sands of Iraq and the pockets of the EEOC.

    Speaking as someone all too familiar with government meddling, the guy up thread nailed it. Antitrust is just another tool for the government to ensure that there are no independent power centers that disagree with it.

    Here's what happens when you give idiot bureaucrats too much power:

    WASHINGTON – The Justice Department wants to know why the NCAA doesn't have a college football playoff system and says there are "serious questions" about whether the current format to determine a national champion complies with antitrust laws.
    Critics who have urged the department to investigate the Bowl Championship Series contend it unfairly gives some schools preferential access to the title championship game and top-tier end-of-the-season bowl contents.

    This is not the Onion. This is reality. It is only perceived as ludicrous because your average Joe actually understands the details of the case and roots for the victims here.

    Most other antitrust cases do not have sympathetic victims, because of the relentless demonization of business. But folks, if it ain't "for profit" it's "for loss". And if it ain't sales it's politics. Old fashioned Anglo-Saxon capitalism has much to say for it, and the people who actually make the computers you type on and the food you eat are producers in every sense of the word, the opposite of the lotus eaters who enforce "antitrust law".

  75. "The reason people don't care about antitrust"

    People do care about antitrust. That's what the bank bailout and Tea Party was all about. It's the media and government who don't care about it.

  76. Best piece I have ever read that was written about Standard Oil:

    Vindicating Capitalism: The Real History of the Standard Oil Company

    The Objective Standard Vol. 3, No. 2.

  77. "Isaac Bickerstaff said…

    I certainly trust the Justice Department less than I trust any Fortune 500 company. Not to say that I trust either group a great deal, but the cure seems worse than the disease."

    I agree. At least a private company is not legally entitled to kill you. Well, aside from Wackenhut and Blackwater that is.

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