Several years ago, the Justice Department forced a North Carolina physician group to go out of business. The DOJ said the group was just a front for “price-fixing” and that insurance companies were paying “supracompetitive” prices, to the detriment of consumers. What I always remember about this case is that three individual customers of the physician group wrote to the DOJ during the public comment period; they said they’d always been happy with the physician group’s services and saw no need for federal intervention. The DOJ’s reply: “Even though these customers liked the service they received . . . they could have received lower prices and better service with competition.”
It’s a simple but important lesson: When the government monopolizes “consumer protection,” state agents decide what constitutes consumer satisfaction, not the actual consumers. The state was not promoting competition in this case, but outlawing it. A firm that was meeting consumer demand was ruled illegal because the DOJ believed the market should look different.
Last year, I wrote about Mark and Marianne Hershiser, a New Mexico couple who operate a small retail herb business. The Federal Trade Commission tried to steal most of the couple’s assets because staff lawyers disagreed with some of the studies cited on the business’s website (including studies financed by other government agencies.) The FTC never produced a single consumer complaint nor alleged fraud; their position was that the Hershisers were wrong to give customers access to information that the FTC did not approve of. Whether the Hershisers’ customers were actually satisfied was irrelevant. Although the couple vowed to fight, they ended up surrendering, and a final order was issued in the case today — an order that effectively restricts their free speech rights for the next 20 years.
The FTC says censorship is always justified in the name of science — it can’t be legal for people to make statements not supported by what the FTC deems “credible and scientific evidence.” By that standard, Austrian economics is illegal, and the sale of books on this website constitute a violation of consumer rights.
I bring all of this up because of today’s headlines trumpeting the European Union’s act of antitrust piracy against Intel. A case like this gets substantial press attention, understandably so, yet the two cases I described above came and went without public notice. Yet it’s these smaller cases that allow the FTC, DOJ, and even the EU to acquire power and slowly break down the fabric of the marketplace. By the time one of the big boys is targeted, it’s too late to mount a meaningful counter-attack. Unlike Somali pirates, there are no snipers who will take out the antitrust interventionists who invade your office and seize your property.
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“Unlike Somali pirates, there are no snipers who will take out the antitrust interventionists who invade your office and seize your property.”
This statement is really counter productive to your argument.
“This statement is really counter productive to your argument.”
I don’t see why. I certainly don’t advocate using snipers. In fact, I opposed their use against the Somali pirates. But I do think that antitrust is a form of piracy, albeit a legal, state-sanctioned form.
Antitrust cases occasionally do do good for the consumer*, but let’s not forget all the times that collusion helps us every day. We wouldn’t have DVD, BluRay, IDE, SATA, USB, Firewire, etc if it weren’t for companies colluding to reduce consumer choice.
*There is the caveat that the consumer ought to bring up the complaint class-action style(red flags optional).
By that standard, Austrian economics is illegal, and the sale of books on this website constitute a violation of consumer rights.
Be careful…speak of the devil, and all that.
(I hope the LvMI has/is making plans for that day)
It would be funny if Mises Institute got struck down by the FTC for “unfair anti-competitive practices” against other Austrian economic institutes in the United States.
“I don’t see why. I certainly don’t advocate using snipers. In fact, I opposed their use against the Somali pirates. But I do think that antitrust is a form of piracy, albeit a legal, state-sanctioned form. ”
I agree, I don’t either. They’re just as much criminals if not more so.
Curious,
Mr. Oliva,
Since you opposed the use of snipers against the Somali pirates, I would like to know what course of action/inaction you would have pursued? (This is a serious, non-antagonistic question).
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