WEBVTT NOTE 'The Myths of Anti-trust' 40th Anniversary 1 00:00:00.000 --> 00:00:09.000 Well, I'm pleased to be up here and I'm not last because I'm the most prestigious, actually I'm the only one on this panel I've never heard of. 2 00:00:09.000 --> 00:00:21.000 But I do want to give a little background of my own situation and how I happen to be involved in this. 3 00:00:21.000 --> 00:00:26.000 because in 1970, I was working for Stauffer Publications 4 00:00:27.720 --> 00:00:30.240 at the peak of Kansas doing ag policy. 5 00:00:30.240 --> 00:00:35.240 I was not a PhD economist, I was a dilettante, 6 00:00:37.280 --> 00:00:40.520 I was a conservative, I'd read a little Ayn Rand, 7 00:00:40.520 --> 00:00:43.120 but I really didn't know much about where I was going 8 00:00:43.120 --> 00:00:46.520 or what I was doing and I was limited in my ability. 9 00:00:46.520 --> 00:00:48.920 Yeah, let's go back to that first page, will you? 10 00:00:51.000 --> 00:01:03.000 Okay, okay. But anyway, so, I, someone asked me to go to a fee weekend seminar. I didn't know what fee was, but I went there and I had an epiphany. 11 00:01:03.000 --> 00:01:16.000 And it really opened my eyes unbelievably about free market economics and this whole worldview that they sort of introduced me to. 12 00:01:16.000 --> 00:01:20.000 And I said, yeah, I want to learn more, I want to learn more, what shall I do? 13 00:01:20.000 --> 00:01:24.000 And to Randy's point, they said, here, read Human Action. 14 00:01:24.000 --> 00:01:31.000 Well, Human Action for a guy at my stage of knowledge and learning was a little bit daunting. 15 00:01:31.000 --> 00:01:35.000 And I could not make a connection between any of this free market stuff 16 00:01:35.000 --> 00:01:38.000 and the agriculture policy that I was working on. 17 00:01:38.000 --> 00:01:42.000 I actually went to the Kansas State University Library in the early 70s 18 00:01:42.000 --> 00:01:54.000 in the early 70s and went through almost every book that I could find on ag policy to try to get some connection to what I'd learned at Fee and what I'd been exposed to. 19 00:01:54.000 --> 00:02:09.000 Actually, I wasn't at the Thursday meeting in which they honored Bill Peterson, but I finally found Bill Peterson's little book, The Great Farm Problem, in the Topeka Public Library, which wasn't much of a library, really. 20 00:02:09.000 --> 00:02:17.600 But I found that, and that gave me hope, that maybe there was a link, maybe I could put these two things together. 21 00:02:17.600 --> 00:02:26.700 In 1973, early 1973, I went to a second fee seminar, which was also in Kansas, but another town, 22 00:02:26.700 --> 00:02:35.400 and everything that I had learned in 70 was reinforced, and I got this, I was energized, I got this commitment, 23 00:02:35.400 --> 00:02:43.600 I got this obsession for doing the proselytization of the world and bringing free markets to 24 00:02:43.600 --> 00:02:46.040 the ag community. 25 00:02:46.040 --> 00:02:51.200 I was very conscious of Leonard Reed's libertarian leadership steps. 26 00:02:51.200 --> 00:02:57.840 The first one is you do no ideological wrong, which ain't so easy as he would say. 27 00:02:57.840 --> 00:03:01.960 Secondly is that you become knowledgeable enough that you can talk to people in your 28 00:03:01.960 --> 00:03:04.840 orbit about these ideas. 29 00:03:04.840 --> 00:03:11.040 And third is that you become so skilled as an expositor of these things that people will 30 00:03:11.040 --> 00:03:13.920 actually seek your tutorship. 31 00:03:13.920 --> 00:03:20.080 And as Leonard used to say, there's no end to the tutin that you can do. 32 00:03:20.080 --> 00:03:27.480 But anyway, at the same time, I was looking for ways to combat what I was hearing in agricultural 33 00:03:27.480 --> 00:03:31.680 economics which was the biggest problem is market power. 34 00:03:31.680 --> 00:03:36.240 That's the biggest problem, that farmers are unable to compete with these huge corporations 35 00:03:36.240 --> 00:03:44.240 who have so much power over them, monopoly is a big problem, and it was just something 36 00:03:44.240 --> 00:03:51.680 was beyond my understanding, and I was getting national review at the time, and there was 37 00:03:51.680 --> 00:04:00.680 an advertisement for the myths of antitrust, and so I sent it off and I got a copy, here 38 00:04:00.680 --> 00:04:05.320 Here it is, I think it's number seven off the press. 39 00:04:05.320 --> 00:04:10.080 But anyway, it was another epiphany for me. 40 00:04:10.080 --> 00:04:20.320 It not only changed my thinking, but it gave me tremendous encouragement to move my life 41 00:04:20.320 --> 00:04:25.580 in the direction that I wanted to go, which was somehow link these two things together. 42 00:04:25.580 --> 00:04:32.820 So what I had up there was, I spent the next five years putting together something called 43 00:04:32.820 --> 00:04:36.940 the Institute for the Study of Market Agriculture and I put it up there just because I wanted 44 00:04:36.940 --> 00:04:41.740 to show you the quality of the advisory board that I put together. 45 00:04:41.740 --> 00:04:45.500 These are not Austrians, for the most part Zeke Pesauer over here on the right is probably 46 00:04:45.500 --> 00:04:51.220 the only one who would be Austrian, but Peter Bauer obviously one of the great names in 47 00:04:51.220 --> 00:04:53.900 and Development Economics, Bruce Gardner, 48 00:04:53.900 --> 00:04:56.660 who went on to Chicagoite, who went on 49 00:04:56.660 --> 00:04:59.300 and became Undersecretary of Agriculture, 50 00:04:59.300 --> 00:05:03.620 Del Gardner, P.J. Hill, Gail Johnson was the Provost, 51 00:05:03.620 --> 00:05:07.740 Cliff Glutrell was at the Federal Reserve Bank of St. Louis, 52 00:05:07.740 --> 00:05:11.140 Don Parleberg, again, who was Undersecretary of Agriculture 53 00:05:11.140 --> 00:05:14.180 under Nixon, Leonard Truman at Kansas State, 54 00:05:14.180 --> 00:05:17.640 and then Ted Schultz, who became a Nobel Prize winner. 55 00:05:17.640 --> 00:05:23.660 So I had really worked, I mean I really worked hard at putting this together and developing 56 00:05:23.660 --> 00:05:24.660 this organization. 57 00:05:24.660 --> 00:05:30.160 And I'm telling you this because I want to explain why Dom's book was so important to 58 00:05:30.160 --> 00:05:31.160 me. 59 00:05:31.160 --> 00:05:36.840 I got to the point where I was so obsessed with this idea that I sold my house and took 60 00:05:36.840 --> 00:05:42.360 the little savings I had and all the equity that we had in our house in spite of the fact 61 00:05:42.360 --> 00:05:47.120 that I had three young children and tried to start this organization. 62 00:05:47.120 --> 00:05:56.880 And in about 1978, actually I came out here and Roger Garrison and I were talking about 63 00:05:56.880 --> 00:05:57.880 this. 64 00:05:57.880 --> 00:06:05.640 I came to Auburn in 1978 to try to connect this institute to Auburn University. 65 00:06:05.640 --> 00:06:13.240 And we had a big meeting with all of the big shots in the university and the board members 66 00:06:13.240 --> 00:06:15.960 and the chief council and all that. 67 00:06:15.960 --> 00:06:24.680 And we got, Roger was really no help at all, we got shot down, we got shot down pretty 68 00:06:24.680 --> 00:06:27.960 bad and they said this is too radical an organization. 69 00:06:27.960 --> 00:06:31.320 With all these Chicagoites, I mean I couldn't believe it, but they said it was too radical 70 00:06:31.320 --> 00:06:32.620 organization. 71 00:06:32.620 --> 00:06:39.200 And I think, Lew told me one time that several years later, when they brought the Mises Institute 72 00:06:39.200 --> 00:06:45.440 to Auburn, he originally was able to affiliate in some modest way with Auburn and that was 73 00:06:45.440 --> 00:06:55.440 That's my contribution, the old saying that your life can always serve as a bad example to someone else or something. 74 00:06:55.440 --> 00:06:59.440 That was my contribution to the Mises Institute. 75 00:06:59.440 --> 00:07:07.440 But anyway, Charles Koch called me in the spring of 1979 and said, 76 00:07:07.440 --> 00:07:12.440 I want you to come out here and talk to me about your institute. 77 00:07:12.440 --> 00:07:26.440 I was so excited because I thought, here's the breakthrough when I'm looking for, he'll give me enough money to make the leap from a fledgling thing I do in my kitchen to a real institute. 78 00:07:26.440 --> 00:07:34.440 When I got there, he said, tell me about your institute. So I did, and he said, well, I'm not really interested in agriculture. 79 00:07:34.440 --> 00:07:52.440 I'm interested in starting a new organization that will be in Washington D.C. and it will be an association of business executives and business entrepreneurs who will commit to a free competitive economy. 80 00:07:52.440 --> 00:08:03.440 It was originally called BLAST, Business Leaders Against Subsidies and Tariffs, but they had changed the name just then to the Council for a Competitive Economy. 81 00:08:03.440 --> 00:08:30.440 And so in 1979, well just back up a little, Charles said I'll tell you what you do, put your organization in the drawer for a few years, get this thing going for us really well, get a nice long list of major corporations that all are anarcho-capitalist, run by anarcho-capitalist executives, 82 00:08:30.440 --> 00:08:38.440 And then when you get that, then if you want to go on with your Ag Institute, maybe I'll help you do that then. 83 00:08:38.440 --> 00:08:45.440 So, I did that. And I went to Washington, and this is an example. 84 00:08:45.440 --> 00:08:52.440 And I just, I put, this is a quote from an article I wrote for the Independent Review some years ago about that. 85 00:08:52.440 --> 00:08:58.440 And you don't need to read the whole thing. But the second point was that here was our message. 86 00:08:58.440 --> 00:09:28.440 and basically Charles allowed me to sort of set the stage for this thing and run it as I proposed and so we said for a corporation or other business entity committed itself to compete solely or primarily through a free and open market relying thereby for its success on the voluntary choice of consumers is an ethical high road. That's what we wanted to instill in the business community that there is a high road by taking the market approach. I added that it's virtually 87 00:09:28.440 --> 00:09:37.440 It was very impossible to overstate the degree to which this point is lost on, if not all together to boo, for those who sit in corporate boardrooms. 88 00:09:37.440 --> 00:09:50.440 It was a very difficult, almost an impossible task to try to criticize business, try to make them understand what we were trying to do and raise money from them. 89 00:09:50.440 --> 00:09:59.240 But in the second paragraph here, I said our classic attack on free markets was to raise 90 00:09:59.240 --> 00:10:01.840 the specter of monopoly and market power. 91 00:10:01.840 --> 00:10:07.120 Our position was not poor, it's supposed to be clear, I don't know where poor came in. 92 00:10:07.120 --> 00:10:11.120 Our position was clear. 93 00:10:11.120 --> 00:10:17.160 We advocated an economy both operated and structured by the forces of the free market, 94 00:10:17.160 --> 00:10:21.160 is one responsive to customers rather than to politicians. 95 00:10:21.160 --> 00:10:22.320 And we stuck to that. 96 00:10:22.320 --> 00:10:25.480 And we had people come to our organization, 97 00:10:25.480 --> 00:10:32.280 and they would say, you're for competition, right? 98 00:10:32.280 --> 00:10:34.840 Yes, well, then we would like your support in this area. 99 00:10:34.840 --> 00:10:37.600 And it was always an antitrust issue. 100 00:10:37.600 --> 00:10:43.880 And they said, you don't really understand competition 101 00:10:43.880 --> 00:10:45.400 if you don't buy this. 102 00:10:45.400 --> 00:10:56.400 Well, we had a library, but I also had an office, and I didn't keep very many books in my office, but I did keep Dom's book. 103 00:10:56.400 --> 00:11:07.400 And when I was a kid, about six or seven years old, one time my father, who was big in the Lutheran Church, had some big shot from the Lutheran Church there visiting him. 104 00:11:07.400 --> 00:11:15.400 And I can remember, excuse me, I was six or seven, I was following him along listening and, you know, trying to hear what the men were talking about. 105 00:11:15.400 --> 00:11:22.400 And the man said, you have really nice children. They're very well behaved and personable. He said, what's your secret? 106 00:11:22.400 --> 00:11:31.400 My father said, this book right here. And he took a book out of his library and it said, children are people. 107 00:11:31.400 --> 00:11:34.600 And the bishop or whatever he was looked at and he said, 108 00:11:34.600 --> 00:11:38.600 Huh, children are people. Is it a good book? 109 00:11:38.600 --> 00:11:43.600 My father said, I've never read it. He said, it's just the title sort of tells the story. 110 00:11:43.600 --> 00:11:51.600 So, when I would get, when these people would come into me and say, 111 00:11:51.600 --> 00:11:57.600 I don't understand competition, I would say, let me just show you where we stand. 112 00:11:57.600 --> 00:12:05.100 And I would take Dom's book out and they would say the myths of antitrust, what is this about? 113 00:12:05.100 --> 00:12:14.600 I said, well, speak to the book because we're not involved in your antitrust case or whatever it is. 114 00:12:14.600 --> 00:12:22.100 We went on to be as radical as we could be. 115 00:12:22.100 --> 00:12:46.100 Just to give you one example, we put in 1981, we did a national conference on economic freedom, this is my last slide, and the whole idea was to have some academic or expert of another kind to make a case for total absolute freedom in some sector of the economy. 116 00:12:46.100 --> 00:12:57.100 Zeke Pacehauer made the case for getting government completely out of agriculture and food policy, George Benson getting the government out of banking and finance, 117 00:12:57.100 --> 00:13:09.100 Sheldon made a case for adding out of communications, on down the line, we had a young kid from Rutgers, Joseph Salerno, gave a talk about international trade, 118 00:13:09.100 --> 00:13:16.100 I think they hung you up on labor, didn't they, that wasn't it, free labor, or international labor. 119 00:13:16.100 --> 00:13:20.100 But anyway, we really tried to do this. 120 00:13:20.100 --> 00:13:24.100 Well, here's the point. 121 00:13:24.100 --> 00:13:31.100 This was my Bible, and I don't want to read too much of this, 122 00:13:31.100 --> 00:13:36.100 but I just want to read you a little bit of the last chapter of this book. 123 00:13:36.100 --> 00:13:47.680 And what Dom said was capitalism is a viable economic system or it is not. 124 00:13:47.680 --> 00:13:52.500 An active policy of government intervention in a free market business system is a contradiction 125 00:13:52.500 --> 00:13:54.620 in terms. 126 00:13:54.620 --> 00:14:00.160 Trades of private property are either voluntary or they are not. 127 00:14:00.160 --> 00:14:04.360 One cannot legislate the free market or create competition. 128 00:14:04.360 --> 00:14:08.000 To have a free market, the government must leave the markets alone. 129 00:14:08.000 --> 00:14:14.460 To have the state make markets free is again a contradiction in terms. 130 00:14:14.460 --> 00:14:18.800 Critics of antitrust policy who pretend to be concerned with free enterprise system have 131 00:14:18.800 --> 00:14:24.380 either not realized or have refused to realize this fundamental issue. 132 00:14:24.380 --> 00:14:27.740 Is there business monopoly in the present economic system? 133 00:14:27.740 --> 00:14:29.920 Of course there is. 134 00:14:29.920 --> 00:14:38.260 Certain favors, privileges, patents, subsidies, tariffs and franchises can and do allow certain 135 00:14:38.260 --> 00:14:45.560 corporations to hold and to employ monopoly power, i.e. governmental power for economic 136 00:14:45.560 --> 00:14:47.300 advantages. 137 00:14:47.300 --> 00:14:52.920 Such plutocratic devices, as William Graham Sumner termed them, are the essence of monopoly 138 00:14:52.920 --> 00:14:57.900 and they are absolutely improper in a free market system and should be ended. 139 00:14:57.900 --> 00:15:04.700 The monopolies that the FCC, the CAB and the ICC maintained could not last a day without 140 00:15:04.700 --> 00:15:06.700 government support. 141 00:15:06.700 --> 00:15:11.540 But this kind of monopoly has nothing directly to do with the mission of antitrust. 142 00:15:11.540 --> 00:15:15.860 Antitrust supposedly was aimed at free market monopoly problems and the marginal competitive 143 00:15:15.860 --> 00:15:20.620 problems that would arise when business was left to pursue its own self-interest. 144 00:15:20.620 --> 00:15:27.060 Yet ironically, the essence of the monopoly in the marketplace is governmental. 145 00:15:27.060 --> 00:15:31.620 Certain elements of the business community have never desired free competition and the 146 00:15:31.620 --> 00:15:35.300 uncertainties and irrationalities often associated with it. 147 00:15:35.300 --> 00:15:40.100 They have sought and gained economic subsidy and protection through the political system. 148 00:15:40.100 --> 00:15:45.180 They have been anxious to use the government to regulate competition because it was supposedly 149 00:15:45.180 --> 00:15:47.180 tending toward monopoly. 150 00:15:47.180 --> 00:15:53.580 Anti-trust, therefore, may be an even bigger hoax than anyone has imagined. 151 00:15:53.580 --> 00:16:00.580 Well, it's not just antitrust. It was the whole cross-the-board issue of government involvement in the economy. 152 00:16:00.580 --> 00:16:11.580 I am proud to say that while that organization was defunct within about six months after I left in the summer of 1984, 153 00:16:11.580 --> 00:16:21.580 and for some of those who read the blogs over the last couple of years with the Cato Institute will understand how it ended, 154 00:16:21.580 --> 00:16:28.460 Charles Koch decided that we wanted to change the direction change the board of 155 00:16:28.460 --> 00:16:34.900 directors and I said well we are bored we have 18 members and they voted 17 to 156 00:16:34.900 --> 00:16:40.700 one against you he said you didn't realize when you took this job that the 157 00:16:40.700 --> 00:16:46.220 board of directors doesn't control the council for a competitive economy it is 158 00:16:46.220 --> 00:16:52.700 There's a shareholder corporation and four or five of us own the shares in the corporation 159 00:16:52.700 --> 00:17:00.280 and we have the right to eliminate your board of directors and start over. 160 00:17:00.280 --> 00:17:06.740 So I left and that was the end of that, but it was a great, I still look at it as one 161 00:17:06.740 --> 00:17:11.680 of the great achievements and one of the great efforts that I made in my life to be able 162 00:17:11.680 --> 00:17:21.320 to be just as radical as I could be, as Leonard Reed said, to commit no ideologically wrong 163 00:17:21.320 --> 00:17:22.320 steps. 164 00:17:22.320 --> 00:17:29.080 We were as leak-free as Leonard Reed would say as it's possible to be. 165 00:17:29.080 --> 00:17:37.040 And I think that I would be remiss if I didn't tell Dom that this book gave me the strength 166 00:17:37.040 --> 00:17:51.040 and the length of character and the arguments that I was incapable of getting from Human Action but which was right down my alley during all those years so tip of the hat to you Don, thank you.