From the NYT:
President Obama’s top antitrust official this week plans to restore an aggressive enforcement policy against corporations that use their market dominance to elbow out competitors or to keep them from gaining market share.
The new enforcement policy would reverse the Bush administration’s approach, which strongly favored defendants against antitrust claims. It would restore a policy that led to the landmark antitrust lawsuits against Microsoft and Intel in the 1990s.
This is no surprise, and it points to a key dispute over what constitutes a free market and what type of capitalist system we want to have, a laissez faire or regulated. Simply put, a free market--as explained in the economics textbooks--is called free because it is free from control by forces on the demand or supply side. Monopolies are argued to violate the free market because they can control the market. There are no downward pressures on prices because the consumer has no options in purchases due to efforts by the monopolists to remove them.
Anti-trust policies allow for government to break apart monopolies in order to allow for competition, but tend to upset monopolists who want their profits (in the perfectly free market profits are zero). The story above points out that the business friendly Bush Administration limited anti-trust actions. Obama's more skeptical attitude towards business, and the apparent suspicion that recessions provide great opportunities for predatory activities, has led to the reversal above.
Another clear indication of the ideological shifts that are underway in American politics.
For further info:
- Definition: laissez-faire.
- Senator Obama's position on anti-trust policy.
- Anti-trust policy timeline.
- Greg Mankiw on Obama's Actions.
