...One of the differences between Sweetwater and Saltwater economists concerns monopoly. On the left, saltwater economists tend to share [the] view that government is the logical check on corporate power. On the right, sweetwater economists believe that government naturally allies with large interests, so that more government involvement tends to strengthen the hand of the corporate giants and weaken the position of consumers and small businesses.No form of legislation has done more to harm consumers -- and to shackle the economy -- than anti-trust legislation.
My own reading of history is that it supports the Sweetwater point of view. Once an industry becomes regulated, economic competition dries up, to be replaced by lobbyist infighting. The profit center moves from the market to Washington, and resources shift accordingly.
Corporate power is a bad thing. I like to see big corporations humbled by innovation and competition.
But fear of corporate power can be a worse thing. Politicians play up that fear, because they are eager to intervene. However, it seems to me that government interventions do not wind up reining in corporations, and the net result is to leave ordinary individuals less powerful than in a less-regulated environment....
Tuesday, September 28, 2004
Arnold Kling, writing at Tech Central Station, spells out the right way to deal with "corporate power":