Bush's Views On Antitrust
February 23, 2000
Last week Gov. George W. Bush (R-Texas) articulated a radical yet sophisticated opinion about antitrust policy. As reported in the February 17 Financial Times of London, Bush said, "My own personal view, is the application of antitrust laws needs to be applied where there are clear cases of price-fixing."
Bush's radical position is that the antitrust laws should apply only to cases of price-fixing, which is what they are for.
Limiting the antitrust laws to cases involving price-fixing would sharply limit their application. At present, the federal government routinely involves itself in corporate mergers, investigates monopolies, predatory pricing, retail price maintenance and other areas. Actual cases of price-fixing are few and far between.
Economist Stan Liebowitz of the University of Texas at Dallas says that Bush is articulating a view of antitrust policy commonly associated with the University of Chicago. Chicago School economists concluded that many antitrust violations did not harm consumers, while antitrust laws did.
During the Reagan years, antitrust policy generally adopted the Chicago view. It no longer viewed mergers and monopolies as being bad per se; rather, they looked at individual cases with an eye toward what was best for consumers. This caused a sharp drop off in antitrust cases.
The Clinton Administration has taken a more activist approach to antitrust policy -- most notably in the Microsoft case -- although it has not gone back to the pre-Reagan policy of strict enforcement.
Bush's laissez-faire view contrasts with that of Sen. John McCain (R-Ariz.), who appears to take a more activist position in this area than Bush. For example, McCain often compares himself to Theodore Roosevelt, famed as a "trustbuster," and has "consistently criticized large corporate mergers in the telecommunications industry," according to the New York Times.
Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, February 23, 2000.
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