A mainstream friend of mine living in Hong Kong asked me a question about the libertarian perspective on antitrust law (what Europeans ungrammatically call “competition law,” just as they quaintly and awkwardly refer to corporate law as “company law”). He noted that there is a libertarian think-tank in Hong Kong that is vehemently opposed to its proposed first competition law. Its leader proclaims himself a libertarian and opposed to antitrust law on those grounds.
My friend asked me if it is correct “that libertarians of all stripes oppose antitrust? I’m sure they oppose regulation, but doesn’t the libertarian belief in markets allow some support for pro-market law? If you know of any good writing on this theme, I’d be interested if you could point me towards it.”
My reply is below, as I thought others might find it of interest.
Some more moderate libertarians probably think some mild version of antitrust law may be necessary, but honestly, I don’t know of many. Virtually all Austrian and radical libertarians oppose all antitrust law on principle, especially anarcho-libertarians as they oppose the state itself and the state would be necessary to impose antitrust law. I oppose it completely and think it is an abomination. The only monopoly I want to get rid of is the state itself. It’s the only real monopoly.
The main view is that the real monopolies come from state force, but that market actors don’t have coercive power. Further, the Austrian view is that the very concept of “monopoly price” absent some coercively backed monopoly, is meaningless and indistinguishable from a market price. Our view is that monopolies that do exist all flow from the state itself, which claims the ultimate monopoly on legal and justice services. the state grants patent and copyright monopolies, for example, then claims it has to regulate the monopolies it helps create, by use of its own antitrust law–that’s why the courts say there is a “tension” between antitrust and patent/copyright law. I’ll say! And other state policies, like minimum wage law, regulations, FDA, taxes, union laws, etc.., all help big companies relative to small ones, thus increasing artificial oligopolies and decreasing competition. So if and to the extent there are any monopolies or reduced competition on the market, it is all due to the state intervention in the first place and hardly justifies further state intervention in the form of antitrust law. Just get rid of the initial regulations. And note that antitrust law never applies to the biggest monopolies of the state and its organs: its own monopoly position, the post office’s monopoly, the monopolies granted by patent and copyright, the monopolies created by the military industrial complex in the form of defense contractors, and inter-state price collusion and cartels (e.g., the IMF, OPEC, the UN itself)–all these are price-setting and collusions and monopolistic… yet none of them are covered by antitrust law. It is only an excuse for the state to regulate private actors, i.e., to impose a creeping fascism (where the state indirectly controls nominally private “capitalist” companies)
This is the classic Austro-libertarian case against it. Robert Bork’s approach is tentative and mainstream, and is not our brand of economic reasoning; he is mired in law and economics and the Chicago positivistic school. The Austrian school has the definitive approach to this and other matters economic.
Antitrust Laws (p. 1117)
Policy Toward Monopoly (p. 1143)
and various sections of this chapter
We’ve never met or corresponded before, but I am sure the Lion Rock Institute is the libertarian institute being referred to here. And yes, we’ve been unapologetically fighting the good fight against the plans to introduce a cross-sector “competition” law in Hong Kong ever since they hatched the idea.
The good news is we’ve neutered the proposed draft law a fair bit, but we are still trying to administer the death blows to the legislation to make sure it doesn’t pass. The next 6 months will be crucial.
Here are a couple of pieces of mine in the WSJ trying a bit of push-back:
I know the arguments against the law won’t be news to you. In the debate here it has surprised me how unfamiliar most lawyers and academics are with the economic and legal flaws of these proposed laws or even the mainstream libertarian opposition. This has lead to, at times, some fairly acrimonious debate – as they seem to believe the only reason one could be opposed is if one is a “puppets of vested interests”, “dark forces” etc. etc.
Incidentally, we hosted Prof. Hans-Hermann Hoppe on Monday for dinner in Hong Kong. I know you are a fan. Great guy. He’s on his way to Sydney for a Mises conference.
If you are even in Hong Kong let us know. We’d be happy to host you too.
The Lion Rock Institute