2005年07月19日

Where antitrust went wrong

[http://news.ft.com/cms/s/dacbfe66e63311d88ddb00000e2511c8.html]



Richard A. Epstein: Where antitrust went wrong

By Richard A. Epstein

Published: August 4 2004 20:45 | Last updated: August 4 2004 20:45



Tom Hazlett’s recent lively exposition of the Google wars represents sound economics down to the minibyte of additional storage space. My purpose in this followon column is not to offer additional praise for the curative power of new entry for economic malaise, but to explain briefly how US antitrust law has gone

awry in its Section 2 cases, before, during and even after the cyberspace revolution.





To us libertarian types the antitrust laws face an uphill fight even under the best of circumstances.

The most dangerous threats to market innovation are government restrictions on entry, which are always difficult to erode even over time. Lamentably, state power has, time after time, been put squarely behind one party to the competitive struggle.

We need think only of the various agricultural pricefixing arrangements that are as much of the farm landscape as tractors and trees.

But that policy is a grievous social error. The principle of first possession, which is a fine rule insofar as it assigns ownership rights of a vacant plot of land to the first occupier, is distorted beyond recognition if the first person to tap into a particular market can keep it for himself in perpetuity.

In those cases where there are no patents or copyrights at stake, it makes no economic sense to support a legal regime that gives consumers no more right to determine their business partners than a piece of sod has to decide who should be its owner.



snip



Remember, the logic of exclusivity cuts two ways: after the fact, it is nice to ask the innovator to share its inventions so that all can obtain it at low cost. But this policy of equal access retards the introduction of that innovation in the first place. In this regard, the policy tradeoffs of the antitrust law tend to merge with that of patents. We cannot get a firstbest solution that guarantees both optimal innovation and optimal sharing simultaneously.
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