WEBVTT NOTE 'The Myths of Anti-trust' 40th Anniversary 1 00:00:00.000 --> 00:00:08.000 I've been using Dom's book in courses in industrial organization and law and economics for 30 years. 2 00:00:08.000 --> 00:00:13.800 And I taught industrial organization at George Mason for seven years, and I used the book. 3 00:00:13.800 --> 00:00:17.100 And I kept using it as I went to other universities. 4 00:00:17.100 --> 00:00:21.900 And the last time I used it was last semester in a course in law and economics. 5 00:00:21.900 --> 00:00:28.900 And I used it as one of the textbooks because I think it's important for students who take these courses 6 00:00:28.900 --> 00:00:32.660 to learn the reality of government regulation. 7 00:00:32.660 --> 00:00:34.420 It's one thing, you know, most of the textbooks 8 00:00:34.420 --> 00:00:36.740 have all sorts of theories of government regulation 9 00:00:36.740 --> 00:00:39.900 and there'll be a few footnotes about some study 10 00:00:39.900 --> 00:00:42.980 of the effects by some Chicago school economists 11 00:00:42.980 --> 00:00:43.820 and that's about it. 12 00:00:43.820 --> 00:00:46.060 There'll be a half a paragraph explaining 13 00:00:46.060 --> 00:00:49.140 the capture theory of regulation or something like that. 14 00:00:49.140 --> 00:00:54.140 But Antitrust and Monopoly has 55 case studies 15 00:00:54.500 --> 00:00:58.380 that apply Austrian economics to the understanding, 16 00:00:58.380 --> 00:01:03.700 And that's the lens through which Dom Armantano looked to understand the effects of all these 17 00:01:03.700 --> 00:01:05.660 federal antitrust lawsuits. 18 00:01:05.660 --> 00:01:11.380 They were all the major federal antitrust lawsuits up to the time he did the research. 19 00:01:11.380 --> 00:01:16.140 And in every single one of them, the firms were prosecuted for cutting prices, expanding 20 00:01:16.140 --> 00:01:21.020 production, inventing new products, doing all the things that any normal human being 21 00:01:21.020 --> 00:01:23.420 would think is competitive. 22 00:01:23.420 --> 00:01:31.260 And so it's still relevant, even though he quit, when he quit, and it's still relevant. 23 00:01:31.260 --> 00:01:32.260 I still use it. 24 00:01:32.260 --> 00:01:33.740 I'm probably going to use it again next semester. 25 00:01:33.740 --> 00:01:37.500 I'm teaching law and economics again, so I'll probably use it next semester. 26 00:01:37.500 --> 00:01:43.500 And Roy mentioned to me before the session that what a shame it is that some young Austrian 27 00:01:43.500 --> 00:01:51.180 didn't follow through and write the sequel with antitrust cases from 1982 on to the present 28 00:01:51.180 --> 00:02:21.180 with a similar format, and that would be a great dissertation for someone to do at a place like George Mason University, if they could just wean themselves away from studying pirates and things like that, and get back to political economy, maybe someday somebody will do it, I don't have high hopes for that though, or the tattoo industry in prison, I think there was a dissertation on that topic too. 29 00:02:21.180 --> 00:02:51.180 and so maybe I'll do it if no one else wants to do it someday but it would be a great addition to the literature and you know at my university I teach in a business school and the students can get a BA in economics they can get a BA degree in business economics and now in the last couple years they can get a BA degree in quantitative economics and if Auburn had something similar and added a BA in Austrian economics I think antitrust them 30 00:02:51.180 --> 00:02:53.580 Monopoly would have to be on the curriculum. 31 00:02:53.580 --> 00:02:55.340 It would have to be one of the books, 32 00:02:55.340 --> 00:02:57.220 if I had anything to do with it anyway. 33 00:02:57.220 --> 00:02:59.380 It would certainly be one of the books that 34 00:02:59.380 --> 00:03:02.140 should be in any Austrian curriculum. 35 00:03:02.140 --> 00:03:03.740 It's the best example I can think of, 36 00:03:03.740 --> 00:03:07.740 of the application of real solid Austrian competition 37 00:03:07.740 --> 00:03:11.660 and monopoly theory to government regulation. 38 00:03:11.660 --> 00:03:15.740 And so that's the way I've always thought of it. 39 00:03:15.740 --> 00:03:18.460 And so what I thought I'd do with the rest of my time 40 00:03:18.460 --> 00:03:23.620 is mostly for the benefit of the people who are younger 41 00:03:23.620 --> 00:03:27.220 than Roy Cordado in the audience and weren't really 42 00:03:27.220 --> 00:03:30.180 familiar with this whole arena of what happened 43 00:03:30.180 --> 00:03:36.260 with antitrust in the 1980s and into the 90s theory-wise, 44 00:03:36.260 --> 00:03:39.700 research-wise, and policy-wise. 45 00:03:39.700 --> 00:03:41.260 In terms of policy-wise, there really 46 00:03:41.260 --> 00:03:45.180 was a bit of a revolution during the Reagan administration 47 00:03:45.180 --> 00:03:47.540 because some of the head of the Federal Trade Commission 48 00:03:47.540 --> 00:03:53.620 was James C. Miller III, who was a student of James Buchanan and Gordon Tullock and Leland 49 00:03:53.620 --> 00:03:59.620 Yeager and people of that sort at the University of Virginia when he was a student. 50 00:03:59.620 --> 00:04:05.100 And when he took over the FTC, he was familiar with a lot of the critiques of antitrust. 51 00:04:05.100 --> 00:04:10.680 I'm not sure he was familiar with Antitrust and Monopoly, Dom's book, but he was familiar 52 00:04:10.680 --> 00:04:15.860 with most of the Chicago School research, the best of which was very Austrian in its 53 00:04:15.860 --> 00:04:22.500 Orientation, because it was the Chicago School people like Yale Brozin and Harold Demsets 54 00:04:22.500 --> 00:04:27.700 at UCLA who challenged the prevailing view at the time. 55 00:04:27.700 --> 00:04:32.260 The prevailing view theoretically was the concentration doctrine. 56 00:04:32.260 --> 00:04:40.580 They purported to find a correlation between industrial concentration and profitability. 57 00:04:40.580 --> 00:04:45.840 And one of the big home runs that was initially hit by the Chicago schoolers was Yale Brozin 58 00:04:45.840 --> 00:04:52.240 Rosen published an article using the same exact data that a Harvard statist, sorry if 59 00:04:52.240 --> 00:05:00.400 I'm redundant, had used in some famous studies showing industrial concentration leads to 60 00:05:00.400 --> 00:05:06.040 higher profitability on average and then they just assumed that the cause of the higher 61 00:05:06.040 --> 00:05:08.480 profitability was collusion. 62 00:05:08.480 --> 00:05:14.680 It was always just assumed or they would invent a couple of hundred oligopoly theories to 63 00:05:14.680 --> 00:05:16.760 to justify the assumption. 64 00:05:16.760 --> 00:05:20.120 But it was never proven, it was just assumed that that was it. 65 00:05:20.120 --> 00:05:22.640 But Brozin took the same data and he said, 66 00:05:22.640 --> 00:05:24.760 well look at the profitability of this industry 67 00:05:24.760 --> 00:05:28.080 that's supposedly a monopoly in 1960 68 00:05:28.080 --> 00:05:29.920 and then control for the business cycle 69 00:05:29.920 --> 00:05:33.080 and see what happens 10 years forward. 70 00:05:33.080 --> 00:05:35.400 And of course what he's found was the profitability 71 00:05:35.400 --> 00:05:37.920 all descended toward the median 72 00:05:37.920 --> 00:05:40.280 and the profitability of the industries at the bottom, 73 00:05:40.280 --> 00:05:41.520 the least profitable, 74 00:05:41.520 --> 00:05:44.040 tended to ascend toward the median also. 75 00:05:44.040 --> 00:05:46.840 and so he found that manufacturing was very dynamic. 76 00:05:46.840 --> 00:05:48.920 Well, of course, at any one point in time, 77 00:05:48.920 --> 00:05:50.680 somebody's gonna be the best. 78 00:05:50.680 --> 00:05:54.280 Somebody has to be at the top, the most competitive. 79 00:05:54.280 --> 00:05:59.200 But if you look at competition as a dynamic instrument, 80 00:05:59.200 --> 00:06:02.300 like the Austrians do, as dynamic and rivalrous, 81 00:06:02.300 --> 00:06:05.640 then this very simple statistical procedure 82 00:06:05.640 --> 00:06:10.640 that Yale-Broson did really blew away this whole idea 83 00:06:10.640 --> 00:06:12.740 that we can just assume that concentration 84 00:06:12.740 --> 00:06:17.660 and Profitability being correlated means there's monopoly power. 85 00:06:17.660 --> 00:06:19.540 And Yale Demsets did something similar. 86 00:06:19.540 --> 00:06:22.060 He had the bright idea that, well, you know, 87 00:06:22.060 --> 00:06:25.980 the cause of higher profitability in some industries 88 00:06:25.980 --> 00:06:28.540 could possibly be economies of scale. 89 00:06:28.540 --> 00:06:31.580 It's not necessarily a James Bond-type conspiracy 90 00:06:31.580 --> 00:06:34.420 to monopolize a market. 91 00:06:34.420 --> 00:06:36.940 And he persuaded a lot of people of that, too. 92 00:06:36.940 --> 00:06:39.940 And the point I'm making here is that when the Chicago School 93 00:06:39.940 --> 00:06:44.060 did become very successful in criticizing antitrust. 94 00:06:44.060 --> 00:06:47.220 It was because they became more Austrian-like 95 00:06:47.220 --> 00:06:51.780 and started doing the type of research that Dom did. 96 00:06:51.780 --> 00:06:54.620 And the Journal of Law and Economics at the time, 97 00:06:54.620 --> 00:06:58.820 published in the 60s and 70s, published a lot of articles 98 00:06:58.820 --> 00:07:02.820 doing not as good as Dom Armantano's book, 99 00:07:02.820 --> 00:07:04.740 in my opinion, for the most part, 100 00:07:04.740 --> 00:07:07.180 but a lot of case studies of antitrust. 101 00:07:07.180 --> 00:07:12.940 In fact, Aaron Director, sort of one of the godfathers of the Chicago School, is purported 102 00:07:12.940 --> 00:07:18.300 to have once said that the invention of law and economics as a sub-discipline started 103 00:07:18.300 --> 00:07:23.380 with him and a few other people saying, now wait a minute, all this antitrust regulation 104 00:07:23.380 --> 00:07:32.540 has been going on for 70 years at that time, lawyers have told us what it's all about. 105 00:07:32.540 --> 00:07:36.580 Have economists actually studied and used economics to understand what's going on with 106 00:07:36.580 --> 00:07:41.340 Antitrust, and the answer was no, and so the Chicago School took it upon themselves to 107 00:07:41.340 --> 00:07:48.660 start applying economics to the understanding of antitrust, so there was a big long trail 108 00:07:48.660 --> 00:07:54.560 of research critical of antitrust at the time, and like I said, the best of it is the most 109 00:07:54.560 --> 00:07:55.560 Austrian type. 110 00:07:55.560 --> 00:08:01.440 The worst of it, though, and what distinguished them from the Austrians was they always held 111 00:08:01.440 --> 00:08:06.720 and a perfect competition as the ideal benchmark, as the ideal, whereas the Austrians don't. 112 00:08:06.720 --> 00:08:12.440 That's why it was taboo and still is to this day in Chicago to question the existence of 113 00:08:12.440 --> 00:08:14.280 antitrust laws. 114 00:08:14.280 --> 00:08:19.200 Because the official story that was told was that there once was a golden age of antitrust. 115 00:08:19.200 --> 00:08:26.400 There was rampant market failure, rampant cartelization, rampant monopolization in the late 19th century 116 00:08:26.400 --> 00:08:31.080 and government came riding into town on a white horse and saved the day, saved the consumer 117 00:08:31.080 --> 00:08:35.160 from the Rapacious Monopolist by Passing the Sherman Antitrust Act. 118 00:08:35.160 --> 00:08:36.820 That's the official story. 119 00:08:36.820 --> 00:08:42.880 And of course, and so George Stickler himself wrote an article 120 00:08:42.880 --> 00:08:46.180 in the Journal of Legal Studies in the 1980s arguing 121 00:08:46.180 --> 00:08:49.220 that the Sherman Antitrust Act was a public interest law 122 00:08:49.220 --> 00:08:51.860 in the same sense as laws against murder are 123 00:08:51.860 --> 00:08:53.660 in the public interest. 124 00:08:53.660 --> 00:08:57.660 And so, and I published an article also myself 125 00:08:57.660 --> 00:08:59.020 in the 80s that challenged this. 126 00:08:59.020 --> 00:09:02.500 It was called The Origins of Anti-Trust and Interest Group Perspective. 127 00:09:02.500 --> 00:09:06.980 And I was motivated by Dom Armantano's research to write this article. 128 00:09:06.980 --> 00:09:12.020 After I read his book, the criticisms, even from the so-called free market people 129 00:09:12.020 --> 00:09:21.060 in Chicago, like Stigler, they shied away from really direct criticism of Dom's book, per se. 130 00:09:21.060 --> 00:09:26.780 But they made the argument that, well, yes, it's gone astray for 100 years, 131 00:09:26.780 --> 00:09:28.740 the enforcement of antitrust. 132 00:09:28.740 --> 00:09:58.740 But it was a good idea at the beginning, just put smart guys like us in charge, and we'll straighten it all out. That was always the Chicago view. And so that's what Stigler said. Stigler said it's a public interest law, just like the laws against murder are in the public interest. And in this article of mine that was eventually published in the International Review of Law and Economics was an attempt to answer them, because I suspected they were very familiar with antitrust and monogamy. 133 00:09:58.740 --> 00:10:28.740 and I did send it to the Journal of Law and Economics first and Richard Epstein wrote me back and said that he rejected it and the letter said sorry we don't criticize Nobel Prize winners around here that was that's all the letter said there was no substance at all and sort of another way of saying sorry I want to keep my job as editor of the Journal of Law and Economics 134 00:10:28.740 --> 00:10:35.180 and so but it did publish it and it's online someplace now it's been 135 00:10:35.180 --> 00:10:41.280 cited all over the place over the years this was I think 1984 84 was originally 136 00:10:41.280 --> 00:10:47.100 published and and so but what it was motivated like I said by Dom's book to 137 00:10:47.100 --> 00:10:50.420 do this because he doesn't start at the origins of the Sherman Act he said it's 138 00:10:50.420 --> 00:10:54.720 the enforcement of the Sherman Act that all the case studies are so this was one 139 00:10:54.720 --> 00:11:00.200 I want to attempt on my part to answer Stigler and the critics about the golden age because 140 00:11:00.200 --> 00:11:04.200 anyone who has studied political economy and public choice knows that this whole story 141 00:11:04.200 --> 00:11:07.720 sounds fishy as can be there. 142 00:11:07.720 --> 00:11:14.360 And so anyway, so what I found was I had a research assistant go dig up all the antitrust 143 00:11:14.360 --> 00:11:19.140 books that are in the library at George Mason and what she did, we had a big stack in my 144 00:11:19.140 --> 00:11:21.340 in my office of all these books. 145 00:11:21.340 --> 00:11:23.100 And then step two was, well, what 146 00:11:23.100 --> 00:11:27.020 do they say about actual prices and production levels 147 00:11:27.020 --> 00:11:30.860 in the 10 years prior to the Sherman Act of 1890? 148 00:11:30.860 --> 00:11:34.540 Because all these books say rampant monopolization, 149 00:11:34.540 --> 00:11:38.780 rampant cartelization, and that was the justification. 150 00:11:38.780 --> 00:11:40.300 And we found that not a single book, 151 00:11:40.300 --> 00:11:43.420 either in the law library or the regular library, 152 00:11:43.420 --> 00:11:47.820 had one statistic showing prices were going up in general. 153 00:11:47.820 --> 00:11:50.180 Because this was, after all, a period of price deflation. 154 00:11:50.180 --> 00:11:52.300 The post-Civil War era was a period 155 00:11:52.300 --> 00:11:54.620 of pretty significant price deflation. 156 00:11:54.620 --> 00:11:56.900 So just that fact should at least 157 00:11:56.900 --> 00:12:01.380 lead you to just question this official mantra 158 00:12:01.380 --> 00:12:04.860 of rampant price increases. 159 00:12:04.860 --> 00:12:06.660 So I said the next step was, well, 160 00:12:06.660 --> 00:12:09.380 let's see if these price data are out there. 161 00:12:09.380 --> 00:12:12.760 And so we did our best to using all the government statistics 162 00:12:12.760 --> 00:12:14.100 that are available. 163 00:12:14.100 --> 00:12:17.140 And in a nutshell, what we found was all the, 164 00:12:17.140 --> 00:12:20.700 There was an intermediate step, I had him go look through the congressional record and 165 00:12:20.700 --> 00:12:24.800 write down the list of all the industries that were being accused in the congressional 166 00:12:24.800 --> 00:12:27.720 arguments of being monopolies. 167 00:12:27.720 --> 00:12:30.780 And so we knew who was being targeted. 168 00:12:30.780 --> 00:12:36.300 And in a nutshell, I found that those industries, they were all dropping prices much faster 169 00:12:36.300 --> 00:12:40.420 than the price level was falling for the 10 years before the Sherman Act and 10 years 170 00:12:40.420 --> 00:12:41.420 after. 171 00:12:41.420 --> 00:12:46.600 And they were all expanding production much faster than GDP was expanding. 172 00:12:46.600 --> 00:12:50.600 and some of them 10 times faster than the economy as a whole was growing. 173 00:12:50.600 --> 00:12:58.600 And so these were the most rapidly growing, innovating, price-cutting industries in the country for 10 years prior to the Sherman Act. 174 00:12:58.600 --> 00:13:04.600 And of course, one response that some people made to that was that, well, it was predatory pricing. 175 00:13:04.600 --> 00:13:13.600 They cut prices for 20 years and lost money for 20 years in hopes that someday they could make a killing. 176 00:13:13.600 --> 00:13:19.600 And that's still a respected theory in mainstream economics, predatory pricing. 177 00:13:19.600 --> 00:13:27.600 I call it the unicorn of economic theory because no one has ever seen one, but people talk about it from time to time. 178 00:13:27.600 --> 00:13:32.600 And where the unicorn theory rests now is in game theory. 179 00:13:32.600 --> 00:13:36.600 So they'll tell you now, well yeah, no one has ever seen a monopoly created this way, 180 00:13:36.600 --> 00:13:42.600 but a game theorist can figure out a game that can show you that it's feasible, that this could happen. 181 00:13:42.600 --> 00:13:50.520 of course that's why it's called game theory it's not it's not serious game it's game and so and so 182 00:13:50.520 --> 00:13:56.120 that's that's where that stupid theory lies right now and there's probably many dissertations being 183 00:13:56.120 --> 00:14:00.920 written about it right at the moment by game theory budding game theorists out there and so 184 00:14:01.720 --> 00:14:06.200 and so I thought I did a pretty decent job in blowing that out of the water this this idea 185 00:14:06.200 --> 00:14:10.200 this public interest theory of the origin of the Sherman Act and then Don Boudreaux and I 186 00:14:10.200 --> 00:14:40.200 I wrote another article about, it was in the Review of Austrian Economics on the protectionist roots of antitrust and it's about the state governments, some of the state governments passed antitrust laws before the federal government did and the same thing happened, they were targeting the price cutters and the most prolific producers at the state level, it was protectionist all the way and this was in the 1880s and so that's out there and it's mostly ignored by the mainstream economists 187 00:14:40.200 --> 00:14:44.760 Of course, they don't want to hear this stuff, but it's out there. 188 00:14:44.760 --> 00:14:51.560 And so another thing that was going on at the time in the 80s was that the Public 189 00:14:51.560 --> 00:14:57.000 Choice School was doing some pretty good work on antitrust. 190 00:14:57.000 --> 00:15:02.040 Bob Tolleson and several co-authors, Bob always had at least five co-authors, 191 00:15:02.040 --> 00:15:05.720 for those of you who know Bob Tolleson's work, so it seems. 192 00:15:05.720 --> 00:15:08.200 They published an article in the Journal of Law and Economics called 193 00:15:08.200 --> 00:15:14.280 about antitrust pork barrel, about how antitrust laws were used as a sort of a hidden form 194 00:15:14.280 --> 00:15:20.880 of pork barrel politics by one company getting, sending people to Washington to lobby to block 195 00:15:20.880 --> 00:15:26.320 a merger of their competitor because they know the merger of the two competitors would 196 00:15:26.320 --> 00:15:29.920 make the two competitors more efficient and more competitive than them. 197 00:15:29.920 --> 00:15:36.040 And so they wrote a really neat article in the JLE about the use of antitrust as a protectionist 198 00:15:36.040 --> 00:15:37.040 tool. 199 00:15:37.040 --> 00:15:40.160 And so they did some good work. 200 00:15:40.160 --> 00:15:44.360 Bill Shugart and Fred McChesney edited a book of readings 201 00:15:44.360 --> 00:15:46.480 called The Political Economy of Antitrust. 202 00:15:46.480 --> 00:15:51.080 It's all public choice inspired articles on antitrust. 203 00:15:51.080 --> 00:15:54.480 But then at the same time, rent seeking 204 00:15:54.480 --> 00:15:57.400 was a big part of the research agenda of the public choice 205 00:15:57.400 --> 00:16:00.120 school at the time. 206 00:16:00.120 --> 00:16:01.720 So they were experts at rent seeking 207 00:16:01.720 --> 00:16:04.800 and were experts at being rent seekers within the economics 208 00:16:04.800 --> 00:16:05.800 Profession. 209 00:16:05.800 --> 00:16:10.760 And one of the examples of being a rent seeker within the economics profession is Tolleson 210 00:16:10.760 --> 00:16:15.620 and a few others started writing articles about how, yeah, the cost of rent seeking 211 00:16:15.620 --> 00:16:21.360 to society, you know, they apparently thought if they could come up with a really big estimate, 212 00:16:21.360 --> 00:16:26.760 like 30% of GDP or something like that, they could become very famous, maybe win a Nobel 213 00:16:26.760 --> 00:16:28.940 Prize or something like that. 214 00:16:28.940 --> 00:16:36.740 And so they started saying things like, well, advertising is wasteful rent-seeking, product 215 00:16:36.740 --> 00:16:43.300 differentiation is wasteful rent-seeking, mergers are wasteful rent-seeking, because 216 00:16:43.300 --> 00:16:45.580 after all, not all of them work out. 217 00:16:45.580 --> 00:16:49.280 Some of them don't lead to lower costs, which is true. 218 00:16:49.280 --> 00:16:56.060 And so they started publishing a slew of articles, whereas the original idea of rent-seeking 219 00:16:56.060 --> 00:17:02.060 in the eyes of Gordon Tullock, who is sort of the modern inventor of the literature in this. 220 00:17:02.060 --> 00:17:07.060 It was all about protection and lobbying for protectionist tariffs, lobbying for subsidies. 221 00:17:07.060 --> 00:17:10.060 That's the wasteful resources, the lobbying. 222 00:17:10.060 --> 00:17:13.060 But now they're saying, no, the free market is wasteful. 223 00:17:13.060 --> 00:17:15.060 And so I'm not the only one. 224 00:17:15.060 --> 00:17:20.060 Steve Littlechild wrote a really excellent article in the Economic Journal around 1980 about this. 225 00:17:20.060 --> 00:17:24.060 And then I wrote one in the International Review of Law and Economics five years later 226 00:17:24.060 --> 00:17:30.140 later, called The Domain of Rent-Seeking Behavior, Private or Public Choice, where I pretty much 227 00:17:30.140 --> 00:17:35.460 laid out the Austrian view of competition and explained why you should not include advertising, 228 00:17:35.460 --> 00:17:40.260 product differentiation, mergers as wasteful rent-seeking. 229 00:17:40.260 --> 00:17:45.220 And Dennis Mueller, who at the time was the president of the Public Choice Society, even 230 00:17:45.220 --> 00:17:51.780 wrote an article in the Journal of Economic Literature saying that there should be new 231 00:17:51.780 --> 00:18:01.780 to determine which types of R&D should be allowed because he thought some types of R&D were just sort of a sneaky rent-seeking. 232 00:18:01.780 --> 00:18:08.780 And so imagine the rent-seeking that would go on if you had a congressional committee that could ban your competitors' R&D spending. 233 00:18:08.780 --> 00:18:18.780 And so that tells you the quality of some of the literature that ends up in the so-called Journal of Economic Literature. 234 00:18:18.780 --> 00:18:23.460 and so and but but this this again this all this personally it was it was 235 00:18:23.460 --> 00:18:28.260 inspired by Dominic Armatano's book because I was always interested in I.O. 236 00:18:28.260 --> 00:18:32.500 it was one of my interests in graduate school and then and I thought well this 237 00:18:32.500 --> 00:18:36.720 is this is just a model piece of scholarship it applies good solid 238 00:18:36.720 --> 00:18:43.860 Austrian theory to to government policy regulation antitrust policy and and we 239 00:18:43.860 --> 00:18:49.620 We need a lot more of that, for sure, and one sort of footnote type of thing I did along 240 00:18:49.620 --> 00:18:56.140 these lines was my article called The Myth of Natural Monopoly, in which I questioned 241 00:18:56.140 --> 00:19:05.140 this whole idea, the whole story that's in the textbooks, that economies of scale arose 242 00:19:05.140 --> 00:19:09.660 and created monopoly in the free market, and somehow the government rode into town on a 243 00:19:09.660 --> 00:19:12.060 and the White Horse Again and Saved Us from Monopoly. 244 00:19:12.060 --> 00:19:13.900 Never happened that way. 245 00:19:13.900 --> 00:19:15.420 The governments created the monopoly 246 00:19:15.420 --> 00:19:18.420 and then economists invented a theory to justify it. 247 00:19:18.420 --> 00:19:21.180 And you can read my article for that if you want. 248 00:19:21.180 --> 00:19:23.260 And the final article that was along these lines 249 00:19:23.260 --> 00:19:25.740 that I wrote was co-authored with Jack High 250 00:19:25.740 --> 00:19:28.420 in the Economic Inquiry in 1988. 251 00:19:28.420 --> 00:19:30.860 It was called Antitrust and Competition 252 00:19:30.860 --> 00:19:32.580 Historically Considered. 253 00:19:32.580 --> 00:19:37.100 And we surveyed every economist in the late 19th century 254 00:19:37.100 --> 00:19:40.780 who wrote anything about competition and antitrust. 255 00:19:40.780 --> 00:19:42.460 And it was a small club back then. 256 00:19:42.460 --> 00:19:45.260 So you were able to survey the entire population 257 00:19:45.260 --> 00:19:47.140 of professional economists. 258 00:19:47.140 --> 00:19:50.820 And it wasn't unanimous, but I think there was one dissenter. 259 00:19:50.820 --> 00:19:52.580 But it was almost unanimous that they 260 00:19:52.580 --> 00:19:56.140 were opposed to antitrust regulation in principle. 261 00:19:56.140 --> 00:20:00.140 They thought it was inherently incompatible with marketplace 262 00:20:00.140 --> 00:20:01.220 competition. 263 00:20:01.220 --> 00:20:03.220 They weren't critics like Chicago schoolers. 264 00:20:03.220 --> 00:20:05.820 They didn't say, put smart guys like us in charge, 265 00:20:05.820 --> 00:20:06.780 and we'll fix it. 266 00:20:06.780 --> 00:20:10.220 They thought the whole idea was inherently incompatible. 267 00:20:10.220 --> 00:20:12.100 And that, of course, is the same way 268 00:20:12.100 --> 00:20:14.220 in which a lot of Austrians think about it. 269 00:20:14.220 --> 00:20:15.860 And so I don't know if any of this 270 00:20:15.860 --> 00:20:19.020 will have any effect on anybody or anything ever. 271 00:20:19.020 --> 00:20:20.940 I'd like to think so sometime. 272 00:20:20.940 --> 00:20:24.620 But it was all inspired by the model of Dom Armantano 273 00:20:24.620 --> 00:20:25.740 as a scholar. 274 00:20:25.740 --> 00:20:27.140 And my time is up. 275 00:20:27.140 --> 00:20:29.140 Thank you very much.