A recent story in the Wall Street Journal highlights the “growing roster of countries” that now want a say in the world’s major corporate mergers. Given the interconnectedness of today’s global economy, it is no wonder that more than 100 international jurisdictions now claim antitrust authority to examine deals, all “embracing different approaches for evaluating whether a merger might harm consumers.”
The best, surest way to prevent monopoly (the ostensible goal of antitrust law, also called “competition law”), isn’t instituting new arbitrary rules and regulations, but rather allowing anyone to engage in any peaceful, voluntary enterprise she wishes. The constant threat of new competitors is the single most effective check on the commercial power of incumbent corporate giants.
Since these incumbents are more entrenched and closer to lawmakers and regulators, relying on legal and regulatory instruments instead of open competition simply creates opportunities for the corruption and abuse that come with “regulatory capture.” Lobbying pressure groups have the access and the resources to tailor public policy to their private ends.
Antitrust law is just one instance of attempted economic planning, based on all of the same fallacies that underpin other centralized economic controls. Efforts to determine or predict which mergers and acquisitions will harm the competitive environment assume that we know far more about the overall economy than we ever could. They represent what Friedrich Hayek famously called The Fatal Conceit.
Hayek understood that markets made up of freely trading and interacting individuals are the only way to organize and coordinate the profusion of dispersed knowledge we call “the economy.” And just as we don’t and in fact couldn’t know all that is necessary to plan an economy, neither can we predict the consequences of, for instance, allowing some mergers but not others.
Still, market anarchists as critical of corporate power as anyone else on the political left. We too believe that something must be done to remedy the exploitative dominance of big business — but both theory and observation have taught us that the state is the disease, not the remedy. It is in fact state-granted privilege which gives today’s corporate powerhouses their chokehold on economic relations.
Once the state’s coercive, criminal privileges are removed from the economic system, there will be no need for “competition laws” designed to prevent any one market actor from growing too large and powerful. Such laws appear desirable only where special regulatory and licensure barriers have already made competition itself illegal, advantaging favored groups.
Rather than adding new layers of mindless and arbitrary rules — to be administered by lawyers and bureaucrats — market anarchists propose that we actually try the free competition we’ve heard so much about. Political and economic power need one another; in truth, it is probably a mistake even to consider them as separate and distinct phenomena, for historically they have always been thoroughly entwined.
Today’s massive multinational corporations are very much the products of state power, the successors of the “mercantile system” criticized by Adam Smith. To rein in their power, we need only allow full, genuine competition. The freest possible system would also be the fairest, obviating the need for antitrust law.