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Shadowboxing and the Infectious Spread of Ideological Battles:

In addition to the big school cases that were decided today, the Supreme Court also decided an antitrust case, Leegin v. PSKS. In Leegin, the Court overruled a 1911 case (Dr. Miles Medical Co. v. John D. Park & Sons Co., for those of you scoring at home) to find that vertical price restraints should be judged under the rule of reason rather than be treated as per se unlawful (as Dr. Miles had held). You can be forgiven if your eyes are already glazing over.

What's striking about this case is the lineup -- 5-4, with the conservative 5 (Kennedy writing) against the liberal 4. Obviously, I am oversimplifying in using the terms "conservative" and "liberal," because the camps aren't that neat. But that's precisely what's so remarkable about this case -- they fell into that familiar 5-4 lineup on an antitrust case with little ideological baggage. Maybe we shouldn't have been surprised when politically charged cases like today's school cases just happened to have 5 conservatives against 4 liberals. But this is antitrust, not some hot-button issue.

Indeed, recent antitrust cases have not followed ideological lines. Some antitrust cases have been unanimous, like Weyerhaeuser v. Ross-Simmons from this Term, NYNEX v. Discon from 1998, Verizon v. Trinko from 2004 (Stevens concurred separately in that one), and State Oil v. Khan (which overruled a prior precedent) from 1997. Others have been split, but have not rigidly followed ideological lines. Notably, California Dental v. FCC from 1999 was 5-4, but Souter wrote with most of the conservatives and Kennedy dissented with most of the liberals. Meanwhile, Bell Atlantic v. Twombly from this term was 7-2, with Souter writing and Stevens and Ginsburg dissenting. And the predictions for Leegin this Term were not for a 5-4 split of conservatives and liberals. So what gives?

I fear that this reflects shadowboxing and the spread of ideological battles from hot-button cases to other ones. What the dissent in Leegin really says is that there is no good reason here to reject stare decisis, and emphasizes that the arguments against Dr. Miles have been aired for 50 years but Congress has not seen fit to reject it. Translation: respect stare decisis, and look to Congress; please don't go too far now that you have the majority, and respect the decisions of Congress (which happens to have had a recent change in its leadership). The majority responds that stare decisis is not an inexorable command and that Congress's failure to act is of no great significance. Translation: we will overrule as we see fit, and don't feel the need to defer to Congress on this or much of anything else.

The dissent highlights this shadowboxing at the end, where Breyer flatly states: "It is difficult for me to understand how one can believe both that (1) satisfying a set of stare decisis concerns justifies overruling a recent constitutional decision, Wisconsin Right to Life, Inc., ante, at 19-21 (Scalia,J., joined by Kennedy and Thomas, JJ., concurring in part and concurring in judgment), but (2) failing to satisfy any of those same concerns nonetheless permits overruling a longstanding statutory decision."

It could all be coincidence, of course. The liberal justices have dissented on some previous cases. But I fear that what's really happening is that ideology has infected an area of law that used to be about as non-ideological as the Supreme Court gets. And if ideology were to infect this area of the law, then why should we have any confidence in the Court's antitrust judgments, and why shouldn't Congress rein in the Court's broad authority under the antitrust statutes?

liberty (mail) (www):
I have to say that I find your premise bizarre, to say the least. I am not often accused of having underdeveloped ideological drive. And as a libertarian economist, I found that case to be the most interesting and important of the three. I would certainly consider the 5-4 conservative / liberal split to be both expected and ideologically driven.

This is a huge case for libertarian economics! From now on, the free market can't be strangled nearly as easily by arbitrary lawsuits which firms use to bind their competition whenever they have trouble keeping up.
6.28.2007 1:29pm
Bill Dyer (mail) (www):
"Per se" analysis is a nineteenth century notion that evolved before twentieth century economics had provided any insights into the rationality of the antitrust laws (and the limits thereto). The "liberals" are really being very, very reactionary here.
6.28.2007 1:33pm
Steve H (mail):
I'm not sure antitrust can be described as non-ideological. I think it goes straight to the conservative-liberal divide as it pertains to big business versus the little guy and/or plaintiffs versus defendants.

In my view, the basic "conservative" view is to favor big business over individuals and small business, and to favor defendants against plaintiffs in civil actions. (None of the politicians seem to be attacking defense lawyers, only plaintiffs' lawyers.) So the fact that the Court would split 5-4 to make antitrust claims harder to bring is not surprising.

Maybe it's a Republican-Democrat thing more than a Conservative-Liberal thing.
6.28.2007 1:33pm
curious:
This is a huge case for libertarian economics! From now on, the free market can't be strangled nearly as easily by arbitrary lawsuits which firms use to bind their competition whenever they have trouble keeping up.

That isn't necessarily the case. ROR cases take a lot longer, expend a lot more resources, and generate a lot more attorney fees than per se cases--often without any resolution to the issue because conditions change in the intervening years (decades).

While I don't believe that RPM was deserving of a strict per se rule, there is something to say for the predictability that it did offer. And, there is even more to say about incremental change in such matters than such a wholesale 180 after 100 years of reliance.
6.28.2007 1:38pm
Cornellian (mail):
Could this be the end of that famous phrase "manufacturer's suggested retail price?"
6.28.2007 1:40pm
AntitrustReader:
This is just another skirmish in the war about the meaning of stare decisis, and in trying to establish rules about when the Court should reverse itself.
6.28.2007 1:41pm
AF:
Twombly and Leegin make a great pair. Let's have tight pleading rules so plaintiffs can't get to discovery by making vague allegations of anti-competitive behavior, but abandon per se rules so the only way of showing an anti-trust violation is through . . . vague allegations of anti-competitive behavior.
6.28.2007 1:41pm
blindgambit:
One minor quibble- the majority's discussion on stare decisis rests, to some extent, on the fact that the Sherman Act isn't really a real statute, but operates in practice more like an authorization for federal common law. Congress has a hands-off approach to the Sherman Act, so stare decisis is not as strong as it is in other statutory areas.

Also, I think the interesting aspect of this decision is that Breyer- a former antitrust practitioner who should have a very good handle on modern econ, wrote the lead dissent somewhat pillarizing econ in antitrust.
6.28.2007 1:41pm
Shake-N-Bake:
Bill Dyer, regardless of whether modern economics says the rule is stupid, aren't the 'conservative' justices simply engaging in precisely what conservatives complain about all the time? Congress could have changed the rule, Congress didn't see fit to change the rule, so the court just does it for them anyway? When the liberals do something like this everyone screams "judicial activism".

I dislike per se rules on a lot of things because it removes any consideration of extenuating facts/circumstances, and perhaps the rule being overruled in this case isn't a good rule (I'm no expert in antitrust), but there are always uncommonly stupid rules on the books that don't get overruled precisely because Congress doesn't see fit to change them.
6.28.2007 1:42pm
Anderson (mail) (www):
If the arguments for price restraints is so compelling, why didn't the businesses and the economists take it to the Congress?
6.28.2007 1:47pm
AntitrustReader:
I'm not sure if the question is meant to be facetious, but if not: "per se" rules are entirely a creation of the Supreme Court, not Congress.
6.28.2007 1:49pm
Shake-N-Bake:
AR, but the Supreme Court's creation isn't a Constitutional decision (quite obviously), it's an interpretation of a Congressional act, so while the Supreme Court may have made the rule, Congress can undoubtedly overrule the Supreme Court by simply amending the statute.
6.28.2007 1:52pm
curious:
I'm not sure if the question is meant to be facetious, but if not: "per se" rules are entirely a creation of the Supreme Court, not Congress.

Right, but I'm pretty sure he was referring to the fact that Congress has had many opportunities (in fact 100 years or so with of them) to overrule Dr. Miles if it didn't like it. It didn't. That must mean something.

S-N-B, is that what you had in mind?
6.28.2007 1:54pm
curious:
with --> worth.

nothing like being late and unproofread.
6.28.2007 1:55pm
AntitrustReader:
Of course Congress could. But Anderson's post suggests that it's somehow improper to go to the Supreme Court first before going to Congress.

More fundamentally, the main reason Leegin "took it to the Supreme Court" is because it was the judicial system that was about to make it pay millions. I'm sure Anderson didn't forget that this was an actual case between two parties...
6.28.2007 1:56pm
Steve H (mail):

From now on, the free market can't be strangled nearly as easily by arbitrary lawsuits which firms use to bind their competition whenever they have trouble keeping up.


liberty, wasn't this case brought by someone who wanted to lower prices, but was rebuffed due to a price maintenance scheme being pushed by his competitors?

If so, then the antitrust laws are being used here to protect the plaintiff's competitors. They are the ones who could not keep up.
6.28.2007 1:58pm
Steve H (mail):
Most importantly, I think today's decision should have Bud Selig shaking in his boots.
6.28.2007 2:00pm
The General:
No amount of "oversimplifying" justifies calling Kennedy "conservative." From now on, it'd be more accurate to refer to those 5 as "the Conservative 4 and the squishy middle, i.e., Kennedy..."
6.28.2007 2:01pm
plunge (mail):
What Breyer fails to understand is that consistency is what terrorists do. Legislative one day, Executive the next, stare decisis matters one day, is irrelevant the next: THAT'S patriotism.
6.28.2007 2:10pm
liberty (mail) (www):
Steve H,

liberty, wasn't this case brought by someone who wanted to lower prices, but was rebuffed due to a price maintenance scheme being pushed by his competitors?

If so, then the antitrust laws are being used here to protect the plaintiff's competitors. They are the ones who could not keep up.


Its not about who is interested in lowering his price at that given moment. All contracts: vertical, horizontal, collusion between workers and between firms, are all part of market competition. They are part of keeping down costs and driving up profits (which are then invested). A free market allows for all of these free contracts.

PSKS should have found another supplier rather than ask government to intercede on its behalf and make the mean mean business change its contract. If PSKS had used the money it spent on its lawsuit trying to force a supplier to act more "competitively" instead on investing in a new supply contract, a new product line, an investment of its own toward lowering costs or improving efficiency, that would actually be competitive behavior and lead to lower costs and lower prices.

Instead, PSKS went like a crying baby to government in order that firms with good business ideas be strong armed to give them up.
6.28.2007 2:30pm
Steve:
But Anderson's post suggests that it's somehow improper to go to the Supreme Court first before going to Congress.

It's perfectly fine to go to the Supreme Court first; the ACLU does it all the time! I just didn't know we were all in agreement on that point.

I understand the argument that we now know more about economics than we used to, but I thought some people believed those policy judgments ought to be made by Congress, not the courts. The courts have operated under a particular scheme for nearly a century, and Congress hasn't seen fit to alter it; don't the principles of "deference" and "restraint" which I hear so much about counsel the Court to attach some significance to that fact?
6.28.2007 2:37pm
Roger Sweeny (mail):
Stuart cites cases from the last ten years and argues that the Supreme Court's antitrust jurisprudence has--until recently--been non-ideological. He may well be right for recent times. But back when I was learning antitrust in the early '70s, it was not and had not been for a long time. Reading the cases, I could almost always predict how the justices would vote based on their general voting records.

The present Court may be ideological when it comes to antitrust, but I suspect that is more a reversion to the historical mean than an historical outlier.
6.28.2007 2:50pm
Richard Riley (mail):
I agree with Roger Sweeny and other commenters: the non-ideological character of antitrust decisions in the last 10-15 years is what may be historically unusual. For example, liberal opponents of Robert Bork's Supreme Court nomination included his free-market antitrust theories as a major count in the ideological indictment against him. (Disclosure: not an antitrust lawyer, just a lawyer who tries to follow Supreme Court developments.)
6.28.2007 3:09pm
David Drake:
Hooray! As a business law practioner who occasionally gets involved in this area, I believe that this decision is right. The per se rule was easy to evade in principal: have the manufacturer announce the price as a condition of the sale and then, unilaterally and without prior attempts to threaten or cajole, simply cut off retailers who sold for less (or more). In practice, however, the manufacturer's employees would often go beyond this to the fatal letter or telephone call: "We're going to cut you off if you keep selling below (above) the price." The former was legal, the latter illegal. Now, all depends on the context: Who proposed the scheme? What's the justification? etc., rather than whether a lawful unilateral pricing program had degenerated into an unlawful "contract, combination or conspiracy."

Cornellian: I think "MSRP" will still play a role because it may make economic sense with some products or in some markets: to give shoppers an idea of what the manufacturer thinks a product is worth and therefore an idea of whether or not he or she is getting a bargain. Sort of like "manufacturer's invoice" in auto pricing.
6.28.2007 3:09pm
Dave N (mail):
Cornellian, we also still need MSRP so that pricing is accurate on The Price Is Right.
6.28.2007 3:18pm
CJColucci:
Does anyone remember a few months ago that we were discussing the new world that Chief Justice had wrought, with its calm, collegial, narrow, technically proficient, unanimous opinions?
I'd say "I hate to say 'I told you so,'" but that would be a lie.
6.28.2007 3:24pm
liberty (mail) (www):

Cornellian, we also still need MSRP so that pricing is accurate on The Price Is Right.


If we still have The Price is Right after Bob Barker.
6.28.2007 3:26pm
MDJD2B (mail):
I'm not sure if the question is meant to be facetious, but if not: "per se" rules are entirely a creation of the Supreme Court, not Congress.


Right, but I'm pretty sure he was referring to the fact that Congress has had many opportunities (in fact 100 years or so with of them) to overrule Dr. Miles if it didn't like it. It didn't. That must mean something.


And Congress can change the statute to reverse this decision as well.
6.28.2007 3:29pm
Steve:
And Congress can change the statute to reverse this decision as well.

Of course they can. Congress can reverse any decision whatsoever that interprets one of its statutes. So why do we ever hear accusations of judicial activism in the context of statutory interpretation cases?

All the talk about judicial restraint and deference to the elected branches goes out the window whenever someone sees a result they favor. Then it's like, "oh well, who cares if a century's worth of experience suggests that this decision is contrary to the will of Congress - they can just change the law if they don't like it!"

Kelo was a decision that could easily be overruled by state and federal legislatures. So it's okay, right, given that if a legislature doesn't like Kelo it can change it?
6.28.2007 3:55pm
Sasha Volokh (mail) (www):
Stuart -- I pretty much agree with everyone who says antitrust is an ideological matter with the conservatives and liberals lining up in expected ways.

(The whole deal about statutory stare decisis, and whether Congress or the courts should be making these rules, I see as a big smoke screen: Those rules are used opportunistically so often that it doesn't even surprise me that the liberals primarily use the statutory stare decisis argument and criticize the conservatives for being inconsistent on that; if the shoe were on the other foot, we'd see it all reversed.)

The most interesting question, I think, is what made you take notice: Many antitrust cases haven't been ideological. Of course put aside the 9-0 cases because there are so many of those; but the antitrust cases with cross-cutting lineups suggest that something else may have been going on.

If so, I think it's the previous state of affairs that was unusual and worth noting, not the current state of affairs. And to the extent that ideas matter here, I would say it's a testament to the power of the Chicago school of antitrust economics, which had a unusually long streak of dominance -- the main opposition came from the old school that was guided by an anti-business ideology -- and it's only now that the post-Chicago economists have been able to come back with good economic models to fight the Chicago people on their own ground.

The anti-RPM briefs were pretty good and economically sophisticated, so it could be that the liberals found that they had good intellectual ammunition here (especially when you add it to the statutory stare decisis smokescreen).
6.28.2007 4:52pm
Anderson (mail) (www):
Does anyone remember a few months ago that we were discussing the new world that Chief Justice had wrought, with its calm, collegial, narrow, technically proficient, unanimous opinions?

That was such a doofusy meme ... of course the earlier decisions in a term are more likely to be all of those things. They're the ones that the Court can agree on without having to debate them all term.

There's got to be a good comedy sketch about the wooing of Kennedy's swing vote.

SCALIA: I've got opera tickets tonight, Tony -- wanna come along?

SOUTER: Here, I baked you a cake -- chocolate, your favorite!

THOMAS: Here's a sweater I knitted for you, in your favorite color -- plaid!

etc.
6.28.2007 5:06pm
abcdefgh:
I find this framing a bit odd -- if the justices really care about things like stare decisis, textualism vs. purposivism, rules vs. standards, etc., shouldn't we expect these arguments to pop up in all types of cases rather than just the hot button issues?

I would think we should be more concerned when this doesn't happen and these types of jurisprudential disputes are absent from cases where we might otherwise expect them.
6.28.2007 5:26pm
Justin (mail):
"THOMAS: Here's a sweater I knitted for you, in your favorite color -- plaid!"

This one's my favorite, and for several reasons.
6.28.2007 5:47pm
SenatorX (mail):
My understanding of libertarian philosophy is that one of the state's primary validities for existence is to create regulation that will promote competition among businesses. The purpose of which is to provide more choice and cheaper prices to the citizens of the state (consumers).

My "pursuit of happiness"(pursuit of property) is entirely proportional to the choices I have to spend the capital of my labor. This is freedom.

I admit I may be missing something but can someone spell out to me (in clear layman's terms) how company's collusion to set price floors helps create competition that benefits consumers?
6.28.2007 6:42pm
AntitrustReader:
Try reading one post below this one, and the links therein.
6.28.2007 6:48pm
Tyrone Slothrop (mail) (www):
Also, I think the interesting aspect of this decision is that Breyer- a former antitrust practitioner who should have a very good handle on modern econ, wrote the lead dissent somewhat pillarizing econ in antitrust.

pillarizing?
6.28.2007 6:55pm
Sasha Volokh (mail) (www):
SenatorX: I can cut that Gordian knot -- your understanding of libertarian philosophy is quite incorrect. (O.K., you may be able to find some people who say this and who claim to be libertarians, but if so, I'll say that's a very minority position among libertarians.)

One libertarian view may be that antitrust -- even though it claims to be pursuing lower prices -- in reality has perverse effects that raise prices, because antitrust ends up reducing efficiency-enhancing mergers and also, more generally, ends up being used for harassment purposes.

I'm not taking any particular view with respect to that argument.

Because the more basic position of mainstream libertarianism is that government exists, among other things, to protect freedom of contract. What one might uglily call "collusion" is therefore everyone's basic right to choose on what terms they'll offer their stuff and how much they'll produce. Libertarians might generally believe that protection of freedom of contract, property rights, etc., will end up being efficient and reducing prices -- but to the extent that happens, it's just a nice side effect of freedom of contract. It's the freedom of contract that's primary, whether it makes prices higher or lower in any individual case, or even whether it makes prices higher or lower overall.
6.28.2007 7:00pm
Tyrone Slothrop (mail) (www):
[T]he more basic position of mainstream libertarianism is that government exists, among other things, to protect freedom of contract. ... Libertarians might generally believe that protection of freedom of contract, property rights, etc., will end up being efficient and reducing prices -- but to the extent that happens, it's just a nice side effect of freedom of contract. It's the freedom of contract that's primary, whether it makes prices higher or lower in any individual case, or even whether it makes prices higher or lower overall.

In other words, freedom of contract is good for you, even when it's bad for you.
6.28.2007 7:19pm
ATRGeek:
As an aside, part of the conversation above is once again revealing the tension between favoring very strong property rights and favoring very competitive markets. People often like both, of course, but these principles can come into conflict, and antitrust law (or competition law, as it is called globally) is basically about that conflict.

Anyway, antitrust can certainly be ideological, but I think the more relevant point is that recent antitrust cases have not typically reflected the standard "conservative/liberal" 5-4 ideological split. So I do think it is fair to wonder why that particular 5-4 split showed up here, and I also think it is quite obvious from Breyer's opinion that it was in fact the issue of stare decisis that brought together this particular dissent.

So, I agree that to the extent the appearance of the standard 5-4 split in this case reflected an ideological split, it was an ideological split regarding stare decisis, not antitrust per se.
6.28.2007 7:29pm
Steve:
It's interesting to see how many people take the view that the Fourteenth Amendment does, in fact, enact Mr. Herbert Spencer's Social Statics. Here's hoping your favorite economic theory never goes out of fashion.
6.28.2007 8:02pm
PGofHSM (mail) (www):
There's also the difference between an economic policy preference and a jurisprudential one. As econ major, I'm inclined to agree that Dr. Miles needed to die. As a law student, however, I'm stunned by Kennedy's blithe declaration that because his decision and the Consumer Goods Pricing Act share the same objective of maximizing competition, there must not be any conflict between a law that in its signing statement was said to "make it illegal for manufacturers to fix the prices of consumer products sold by retailers." I realize that signing statements (hi, Mr. President!) are by no means conclusive about Congressional intent or the popular understanding of the time of what a law signified, but the idea that Congress was not indicating something about Dr. Miles in its passage of the CGPA seems untenable.
6.28.2007 8:53pm
liberty (mail) (www):

My understanding of libertarian philosophy is that one of the state's primary validities for existence is to create regulation that will promote competition among businesses. The purpose of which is to provide more choice and cheaper prices to the citizens of the state (consumers).

My "pursuit of happiness"(pursuit of property) is entirely proportional to the choices I have to spend the capital of my labor. This is freedom.

I admit I may be missing something but can someone spell out to me (in clear layman's terms) how company's collusion to set price floors helps create competition that benefits consumers?


Sasha already covered the basics, but let me add that:
(1) Its a positive freedom that you are asserting (manufactured choice or competition) which libertarians don't tend to sign on to. Government needs to stay out and allow you to be free, not to actively provide you choices and opportunities*. This is why libertarians don't generally sign on to the idea that government should provide public schools so that we all have equal employment opportunity, or for that matter that government should provide the jobs, or set the prices of goods or do any other positive action that one could argue would ensure more equal opportunity or choices.

(2) I am of the opinion that it is entirely mistaken to think that antitrust provides more competition or choices. "How can you argue that?", you might ask, "Clearly antitrust enforcement actively breaks up monopolies and injects more competition and more choice into a given market." Well, just as income support or a minimum wage clearly improves the standard of living of the poor when they hand over money to the poor or mandate employers to do so, this is only the effect in the short run. In the longer run we must take into account the next period effects: higher taxes to pay for income support, removal of welfare recipients from the workforce, lower investment by firms paying higher wages, unemployment among the low skilled workers, etc. When it comes to antitrust, we must ask what effects these laws must have on firms and investors looking at the industry when they determine how much they can risk on investment and entry. We must aslo ask what the suing firms otherwise would have done-- would they have been forced to innovate? Or make a different contract - e.g. to use a competing supplier (which would then have changed the dynamics of the supplier firms, increasing competition and cost cutting within that sector)? When all of this is taken into account, one begins to see how the heavy hand of government is suppressing a dynamic marketplace, and ultimately will raise prices for the consumer and reduce growth in the economy.

*Though it can actively provide defense of life in the form of police and military.
6.28.2007 9:23pm
SenatorX (mail):
Well, those are good arguments. I won't disagree with the role of government to enforce private contracts. I do however still have some problems with the court ruling and also with the definition of libertarian proposed.

One confusion I commonly run across is regarding government regulation. The difference between government as a central planner and as a regulator. The key difference being arbitrary rulings and the Rule of Law. I can't remember the specific quote but something by Lord Acton about "People are free when they know the law, not when there is no law"(paraphrase!) I am not oppressed by standards among the states on weights and measures or street laws.

I don't see the libertarian view as one that says government must not regulate. It's the definition of regulation and the fascist collusion between businesses and government that is the problem. To the extent that government has any right to exist it is for protecting the rights of its citizens.

I agree that price is an offshoot benefit of competition and choice is the primary benefit. But the opposite of the price being set by competition is centrally planned pricing. One offshoot of this is business influencing government in its favor to the detriment of the consumer.

Tell me who has the power? Apple or the manufacturers?

Scalia's argument doesn't seem correct to me. There is no assurance that a higher profit margin for retailers translates to better services for the consumer. No way.

Instead it looks to me like this will exclude smaller retailers from carrying certain products. They can't buy/move enough to make profit on the enforced price. Big box wins.
6.28.2007 10:15pm
Sasha Volokh (mail) (www):
SenatorX: This isn't a Scalia opinion, it's a Kennedy opinion.

Also, I'm not sure how collusion involves business influencing government. Resale price maintenance -- as well as other forms of collusion in the antitrust context -- is businesses agreeing among themselves. Maybe there are cases of businesses getting government to do things for them -- "fascist collusion between businesses and government," as you put it, may be a real problem -- but the vast majority of "collusion" antitrust cases are just businesses agreeing among themselves how much to produce and how much to charge.

It's no different than any other kind of agreement that any group of people can make among themselves, either informally or by contract. Most of the time, the government enforces such agreements (if they're contracts) or at least doesn't ban them (if they're informal). The difference is that in antitrust, any agreement on price is automatically illegal (when it's "horizontal," i.e., between companies at the same level) or (until today) used to be automatically illegal (when it's "vertical").

In any event, you may think that's fine, and that we should prevent those sorts of agreements for the sake of the consumer (if you believe this in fact helps the consumer, which I've taken no position on, and which "liberty" has disputed above). Pro-consumer? Maybe. Pro-competition? Maybe. Pro-lower-prices? Maybe. But whatever it is, it's a mistake to call it libertarian or free-market (and it's a misconception to think all those positions are essentially the same).
6.29.2007 12:37am
ATRGeek:
liberty,

The so-called "Chicago School" of modern competition law is sensitive to the long-term concerns you outline. Even the "Post-Chicago School" remains sensitive to those concerns, although it uses empirical data to suggest that anticompetitive actions which lead to net harm to consumers is sometime more commonplace than the "Chicago School" theorizes.

Sasha,

You write; "But whatever it is, it's a mistake to call it libertarian or free-market ...."

I agree that libertarianism, at least as some people conceive of it, often favors very strong property rights. By the way, some would suggest that to the extent the state ultimately enforces those property rights, it is always the case that property owners are colluding with the state to achieve their ends.

But in any event, as I noted above, that brings libertarianism into potential conflict with "free-market" principles. Now it is true that one way a market could not be "free" is if the government was doing things like setting prices. But at least in some conceptions of "free markets", another way a market could not be "free" is if, say, sellers were getting together and fixing prices, as opposed to buyers and sellers setting prices by mutual consent.

Of course, I realize a strong-property-rights libertarian might respond that the sellers have a right to do that. They may even assert that all that is needed for markets to be "free" is that private property owners of one sort or the other are setting prices, and not the government. But that is not such an obvious argument, and it is certainly a plausible argument that a market is not truly free if prices are not being set by the mutual consent of both sellers and buyers.

In short, when one says "free markets", the obvious question is "free of what?" A strong-property-rights libertarian may limit their answer to "free of direct government regulation". But others might suggest a "free market" must also be free of private efforts to circumvent the process of having the terms of the market exchanges be set by the mutual consent of sellers and buyers.
6.29.2007 8:28am
Sasha Volokh (mail) (www):
ATRGeek: I'm aware of all these arguments; indeed, it's a common argument on the left to suggest that people aren't truly "free" unless they have certain realistic options open to them in life, not just a legal right ("The law in its majesty forbids the poor and the rich alike to sleep under bridges...."). This relates to the common argument that freedom should be understood in terms of bottom-line possibilities for action, not just the absence of compulsion, which includes a role for positive rights.

I don't mean to argue against that here. (I do in fact disagree with that conception of freedom, but that debate is for another place.) What I do say, however, is that "free-market," AS THAT TERM IS MOST COMMONLY USED, refers to a state where the government enforces property and contract rights and otherwise doesn't meddle.

It's true that some people instinctively equate "free market" with the notion of "perfect competition" that rules out collusion, so anything non-"perfect competition" is by the same token non-"free market," whether the distortion is introduced by government or by private parties. I think this is a mistake, purely on the level of usage. I think that descriptively, "free market" is used more often to mean the absence of government intervention other than the protection of contract and property rights; so it would introduce confusion to blur the meaning of the term by importing a concept of "perfect competition."

This may become a theme, ATRGeek :) , but I'm making a purely positive point here, not a normative point. I do in fact believe in libertarianism and oppose antitrust, but that's not what I'm arguing in this series of comments; I'm only arguing against part (3) of the view that (1) favors antitrust, (2) believes that it increases consumer choice, and (3) seeks to paint it as "libertarian" or "free-market" on that ground. If you believe (1) and (2), I think you should come up with different words to characterize it.
6.29.2007 12:32pm
Roger Sweeny (mail):
SenatorX

One confusion I commonly run across is regarding government regulation. The difference between government as a central planner and as a regulator. The key difference being arbitrary rulings and the Rule of Law. I can't remember the specific quote but something by Lord Acton about "People are free when they know the law, not when there is no law"(paraphrase!) I am not oppressed by standards among the states on weights and measures or street laws.

You are absolutely right. The problem is that there is no simple rule to determine when something is one or the other. There aren't even complex rules that always work.

Setting standards is not a simple technocratic thing. It will almost always help some and hurt others (however, simple standards that have been in effect for a long time, e.g., the definition of a pound, probably are neutral).

I just ran across this in a wikipedia article about the Yankee Network, the nations first FM network:

The Yankee Network faced a powerful opponent—the Radio Corporation of America (RCA), which saw FM as a threat to its established AM radio business. RCA was also concerned that Yankee's technique of "networking" their service around New England via inexpensive, off-air FM relays instead of AT&T phone lines, would open the door to many less well-funded groups establishing competition to RCA's established network, NBC. RCA, under general manager David Sarnoff, successfully pressured the Federal Communications Commission (FCC) to move the FM radio spectrum from 42--50 MHz to 88--108 MHz in 1945. This required massive hardware retooling at all FM broadcasters. Some affiliates dropped out, forcing the Yankee Network to lease phone lines from AT&T to fill in the holes between stations. The added costs to broadcasters and the obsolescence of all FM radios at the time, set back FM broadcasting for a decade or more. Driven to despair over the FM debacle, [Edwin H.]Armstrong [the inventor of FM] jumped to his death from the thirteenth floor window of his New York City apartment on January 31, 1954. ...

The Yankee Network was also on the receiving end of the FCC's first major act of censorship. In 1938, Yankee was airing editorials against President Franklin Delano Roosevelt. The FCC requested that the network provide details about these programs. Yankee got the drift and dropped the editorials. The FCC declared that radio stations, due to their public interest obligations, cannot be editorially devoted to the support of any particular political position. In application, this meant that airing Roosevelt's fireside chat was considered nonpartisan, but broadcasting a critique of his proposed legislation would be unacceptably biased.
6.29.2007 2:33pm
ATRGeek:
Sasha,

I'm not a big fan of armchair lexicology. In other words, unless you happen to have studied the issue, I don't think you are really in the position to declare how the term "free markets" is "most commonly used", let alone to make your declaration on this subject all in caps. I'd also note that in my experience, libertarian-leaning people tend to overestimate the popular support for their views. I consider myself subject to this error, by the way, although I am far from a strict libertarian--indeed, I gather you'd deny me any use of the term at all in light of my heresies.

Moreover, I don't see how your claim about which view about free markets is "most common" matters. My point was that some people think of free markets in the way that you describe (we can call that the "libertarian view of free markets"), and some do not (I take no stand on which view is "most common"). And so I think your original implication that it is a "mistake" to call anything besides the libertarian view of free markets a "free market" view at all is wrong, because I don't think there is anything approaching a consensus on the issue of what the term "free markets" actually means.

Finally, for what it is worth you certainly do not have to be "on the left" to believe in competition law. In fact, I suspect that from the economic left's perspective, this is all a petty squabble among different kinds of people on the economic right, since everyone in this discussion is still talking about having the markets do things like set prices.
6.29.2007 3:58pm
liberty (mail) (www):

In fact, I suspect that from the economic left's perspective, this is all a petty squabble among different kinds of people on the economic right, since everyone in this discussion is still talking about having the markets do things like set prices.


That "economic left" then would be the socialist economists. Every economist other than socialist economists and other kinds of planners would have the market "do things like set prices."

I will avoid saying that I know what definition is "most commonly used" for the "economic left" but I would guess that some economists who are not socialist would often be considered to be part of it.
6.29.2007 4:34pm
ATRGeek:
By the way, I just checked wikipedia's article on "free markets", and as I suspected one would find a great deal of support for multiple views on what that term means.

For example, it starts with:

"A free market describes a theoretical, idealised, or actual market where the price of an item is arranged by the mutual non-coerced consent of sellers and buyers, with the supply and demand of that item not being regulated by a government (see supply and demand); the opposite is a controlled market, where government sets or regulates price directly or through regulating supply and/or demand."

That definition is actually consistent with both the views we have sketched.

Similarly, compare:

"The necessary components for the functioning of an idealized free market include the complete absence of artificial price pressures from taxes, subsidies, tariffs, or government regulation (other than protection from coercion and theft), and no government-granted monopolies (usually classified as coercive monopoly by free market advocates) like the United States Post Office, Amtrak, arguably patents, etc. ..."

with:

"In an absolutely free-market economy, all capital, goods, services, and money flow transfers are unregulated by the government except to stop collusion that may take place among market participants."
6.29.2007 4:36pm
ATRGeek:
liberty,

I suspect you are misdefining "socialism". Socialism is the actual ownership of the means of production by the state. State regulation of things like prices, supply, and demand thus falls short of actual socialism to the extent the means of production remain in private hands. So, for example, when Nixon instituted price controls on August 15, 1971, he did not in fact turn the United States into a socialist country, because he did not in fact have the government take ownership of the means of production.

All that said, I have no particular interest in trying to define terms like "the left" and "the right", because there is very little widespread agreement on what those terms mean. And that is true, among other reasons, precisely because people like to set the line between "the right" and "the left" in such a way to make their own views look somewhere close to the center. So, for example, people who think of themselves as "on the right" will try to set the line where "the left" begins as close as possible so that they can claim to be near the center, and vice-versa with people who think of themselves as "on the left". The flipside of this is that people who think of themselves as "on the right" will tend to describe large numbers of people as "on the far left" (or, less kindly, as "moonbats", "socialists", "communists", and the like), and similarly people who think of themselves as "on the left" will tend to describe large numbers of people as "on the far right" (or as "wingnuts", "fascists", "Nazis" and the like). Again, that is all rhetoric designed to lay claim to being a moderate and to paint those with significant disagreements as extremists.

And since those games bore me, I tend not to play them.
6.29.2007 4:53pm
ATRGeek:
By the way, one of the interesting things that can follow from an understanding of the true definition of socialism (the state ownership of the means of production) is that there is such a thing as "market socialism" (at least in theory), which would be an economic system in which the state owns the means of production but pricing and output levels are set by markets.
6.29.2007 5:06pm
Sasha Volokh (mail) (www):
ATRGeek: I accept that places like Wikipedia would allow for both, but I still claim that my way is more common. But it's an empirical debate, so it's susceptible of resolution by data, and I have no particular emotional stake in this.

I'll disagree with you on your claim that I tend to overestimate the popular support for my views. If anything, I tend to think libertarian views, at least in the form that I espouse them, have vanishingly little support. As a result, I do not insist that people use "freedom" or "liberty" or "right" to only mean "negative freedoms" and the ilke, in the libertarian sense. "The right to health care" is, in my view, so entrenched today, that if someone used it, it would be incorrect to call them wrong. (Of course I could still disagree on whether that claimed right existed; but I would grant that it was O.K. to call their claimed thing a "right.")

My belief -- though again this is all empirical -- is that people are unlikely to argue against freedom or rights, because those are rhetorically attractive, so they seek to redefine what they want as freedom or rights, and sometimes they are successful at this over time. But people are more likely to argue against the free market, claiming, for instance, that markets need to be mostly free but wisely regulated. Yes, not everyone who favors antitrust would characterize it as "wise regulation"; some call it merely implementing a free market. But my empirical belief is that "free market" is used that way less often.
6.29.2007 5:42pm
liberty (mail) (www):
ATRGeek,

1. I agree with your definition of socialism. Still, economists that don't beelive in state ownership of the means of production would agree that the market should set prices. -- what I think your are possibly tryign to say is that the government can set a single price without the entire system becoming socialist. I agree with that. But I was responding to your claim that "In fact, I suspect that from the economic left's perspective, this is all a petty squabble among different kinds of people on the economic right, since everyone in this discussion is still talking about having the markets do things like set prices." In general, economists that do not want the government to set all prices (whereby they would have to be said to own the means of production, because ownership implies the ability to set the price of the products created using said ownership) would hence beleive that the market should "do things like set prices" (with rare exception).

2. I am happy to admit that I am an "extremist" in my libertarian views, given that the current set of views is unfortunately far too statist in my opinion. I won't open the can of words about fascism being "on the right" ...
6.29.2007 5:50pm
liberty (mail) (www):
Oh, as to market socialism-- how can the marekt set the prices if the state owns the means of production??? That is most certainly a logical impossibility. State ownership is monopoly ownership, hence the state sets the price.
6.29.2007 5:52pm
liberty (mail) (www):
Let me add that it isn't just a monopoly of a single and un-essential item, where supply and demand can still have some effect. Complete state ownership of the means of production is monopoly of wages and monopoly of all goods: hence, the state must set all prices even if it attempted not to. It must set wages, as it is the only employer (even if it is decentralized down to the firm level, it is still the only employer, it is still the state determining the wage). It must set prices as it is the only supplier.
... I can discuss this all day, but I am interested in your argument.
6.29.2007 6:00pm
Sasha Volokh (mail) (www):
ATRGeek -- liberty says: "I can discuss this all day." This turns out to be in fact literally true.
6.29.2007 6:16pm
ATRGeek:
As I said, Sasha, I have little interest in armchair lexicology.

liberty,

First, I am not entirely sure what you are interpreting me as saying. But to the extent you are introducing the idea that markets can actually be on a spectrum between no government price-setting to the government setting all prices, that is certainly true. More broadly, we might define a spectrum between perfectly free market-based economies and complete command economies, and many people favor "mixed economies" which fall somewhere along this spectrum. My prior point was just that our entire conversation about whether competition law was consistent with "free markets" had still assumed that there would be no government price-setting whatsoever in free markets.

As for market socialism, here is some reading for you:

Market Socialism

But if you want the two-second answer to your logical puzzle, it is that the state can own the means of production but still sell the goods and services it produces through markets. In fact, the state can even set up competing firms.

Which in some sense brings us full circle. We began with the observation that monopoly pricing is not inconsistent with strong private property rights. It turns out the converse is also true: competitive pricing is not inconsistent with state ownership of the means of production.
6.29.2007 6:19pm
liberty (mail) (www):
ATRGeek,

I was asking for you to defend your claim. I am aware that others have argued that it is possible. It is in fact not logically possible (or so I am prepared to argue until the cows come home) for the state to own the means of production and simultaneously "sell the goods and services it produces through markets [as we understand markets, with prices determined by supply and demand]." Nor is it true that "In fact, the state can even set up competing firms. "

For markets to function in any way as they do in a free market (and you are correct that it doesn't have to be a completely free market for this to be true) the owners of the firms in the market must be private owners -- they mustn't all be the same person -- and therefor each have his own profit motive, own control over output and price.

If the state owns the means of production, this isn't the case. The state determines the output and the price.

If the state decides that it wants to take advantage of the market to set price and recognizes that in order to do this it must give individual firms control over output, and over their price then it can do so.

At that point, firms will either go ahead and become responsive -- for this to happen they will require a profit motive, so the state will have to let them keep a proportional amount of profits: e.g. tax them rather than expropriating all profits for redistribution -- or they won't, if they have no incentive. In the former case, we now have firms with control over their own output, price and profit: we have a free market system.

On the other hand, if the state tries to allow the market to help set the price, while it still controls output, this is impossible. As you know, for the market to set the price, both supply and demand must be free to adjust.

If the state doesn't beleive in profit motive and allows firms to adjust both output and price but it still expropriates all profits for redistribution, and firms cooperate, then you could argue that it is still state ownership of the means of production with market prices: but can you imagine firms cutting costs, competing down prices, innovating and otherwise acting as free market firms, all with zero profit motive? And what advantage is this version of "market socialism"? [ In addition one could ask: Does the state really completely *own* the means of production if it has no control over the use of the means, only control of the profits reaped by them? ]

Isn't it just a redistribution scheme at that point-- it isn't planning of any sort. It is only likely to reduce the efficiency of the market, given the disjunction of the profit incentive while not offering any better a redistribution scheme than simple taxation would offer. So, it isn't really "market socialism" nor does it produce the desired outcome of either a market system or a socialist system. Its really just a market system with oppressive taxation (like a 90% flat tax kind of).

Lange, by the way, argued something slightly different. He argued that with essentially perfect information, planners could set the price by imitating a market (you argued it could be done in an actual market). This is also impossible. I can explain why if you want.
6.29.2007 6:58pm
Sasha Volokh (mail) (www):
ATRGeek: In fact, you do have an interest in lexicology, whether of the armchair variety or not. Recall that I had said, in response to SenatorX, that it was a mistake to call antitrust "libertarian or free-market"; then you said no, arguing that "free-market" could admit of a non-libertarian meaning. Then we started arguing about that.

Now as far as I'm concerned, correctness in using words is a question of usage. So all questions about the meaning of a word are resolved by reference to usage. Because I don't have easy access to actual data on this -- as none of us do, usually, when we argue about meaning -- I told you my belief regarding how most people used the term.

Now you're free to disclaim any interest in armchair lexicology. But I note that you did get yourself into a lexicological debate and took a couple comments' worth of trouble participating in it. I'm in an armchair and I suspect you are too. Remember how, once upon a time, you declared you weren't interested in arguing about whether I had changed my mind over a series of blog comments, and then kept claiming that I had?
6.29.2007 7:01pm
ATRGeek:
liberty,

It seems to me you are now raising not "logical" problems, but rather "practical" problems (such as how to motivate the managers of firms to compete with each other if they have no stake in the profits). I happen to agree there are deep practical problems with "market socialism", so I am the wrong person to ask to defend market socialism against practical arguments of that kind.

Sasha,

The distinction between us is that only you are saying that everyone who does not agree with your view of free markets is making a "mistake" to even use the term. And only you are claiming to have such a comprehensive knowledge of the usage of the term "free markets" that you can declare which usages are most common. For that matter, only you are claiming the second proposition is actually relevant to the first. In other words, my response to your claim that your preferred use of the term is the most common use of the term is not, "I believe you are wrong, Sasha." My response is, "I have no reason to believe you are right, Sasha, and I doubt you have a sufficient reason either, and in any event it doesn't matter."

By the way, I was never interested in arguing with you about whether you changed your claim. That doesn't mean I will back away from my views on such a subject, nor that I will refuse to defend my views, if challenged to do so. I just think that isn't a particularly interesting sort of conversation (and I'd suggest it wasn't then either).

So, if your point is that you can challenge me into engaging in armchair lexicology, just as you challenged me into defending my claim that you had changed your view, you are probably right. But it will still be a boring conversation if you choose to do so.
6.29.2007 7:21pm
ATRGeek:
By the way, based on my own experience having debates with academics, there is sort of a equivalent to Godwin's Law when it comes to a claim like, "I don't think you are using that term the way people normally use that term."
6.29.2007 7:26pm
SenatorX (mail):
ATRGeek I agree with what you have said except for the definition of socialism. If the state controls the distribution and not the production you have exactly the same problem. Who gets what is just as easily controlled by what goes where/when as to who makes what and how much. Or perhaps the state tries to control demand by making things illegal. All the same problem when the state interferes.

Sasha, is it possible that it is your view of "libertarianism" needs to change to include competition as a key component? Prices are going to be set either arbitrarily by someone (retailer/government) or by the "free market" which is the distributed processing of all those involved and their best information. The freer the flow of information the more accurate the values. Any price fixing is just a distortion that leads to all kinds of imbalances to the detriment of the consumer.

Last I have a quote:

"It is important not to confuse opposition against this kind of planning with a dogmatic laissez faire attitude. The liberal argument is in favor of making the best possible use of the forces of competition as a means of co-coordinating human efforts, not an argument for leaving things just as they are. It is based on the conviction that, where effective competition can be created, it is a better way of guiding individual efforts than any other. It does not deny, but even emphasizes, that, in order that competition should work beneficially, a careful thought out legal framework is required and that neither the existing nor the past legal rules are free from grave defects. Nor does it deny that, where it is impossible to create the conditions necessary to make competition effective, we must resort to other methods of guiding economic activity. Economic liberalism is opposed, however, to competition's being supplanted by inferior methods of coordinating individual efforts. And it regards competition as superior not only because it is in most circumstances the most efficient method know but even more because it is the only method by which our activities can be adjusted to each other without coercive of arbitrary intervention of authority. Indeed, one of the main arguments in favor of competition is that it dispenses with the need for "conscious social control" and that it gives the individuals a chance to decide whether the prospects of a particular occupation are sufficient to compensate for the disadvantages and risks connected with it.

The successful use of competition as the principle of the social organization precludes certain types of coercive interference with economic life, but it admits of others which sometimes may very considerably assist its work and even require certain kinds of government action. But there is good reason why the negative requirements, the points where coercion must not be used, have been particularly stresses. It is necessary in the first instance that the parties in the market should be free to sell and buy at any price at which they can find a partner to the transaction and that anybody should be free to produce, sell, and buy anything that can may be produced or sold at all. And it is essential that the entry into the different trades should be open to all on equal terms and that the law should not tolerate any attempts by individuals or groups to restrict this entry by open or concealed force. Any attempt to control prices or quantities of particular commodities deprives competition of its power of bringing about an effective co-ordination of individual efforts, because the price changes then cease to register all the relevant changes in circumstances and no longer provide a reliable guide for the individual's actions."
F.A. Hayek -- The Road to Serfdom pg 41-42

The court removed a regulation that applied to everyone and allowed price fixing. Further they removed something complaint with the rule of law and introduced arbitrary rulings.
6.29.2007 8:11pm
liberty (mail) (www):

It seems to me you are now raising not "logical" problems, but rather "practical" problems (such as how to motivate the managers of firms to compete with each other if they have no stake in the profits).


Not really. That was only a minor part of my overall argument, but in fact behavioral response is a core part of economics. If people didn't respond to price increases, there would be no logical problem with increasing prices on everything in order to raise more revenue (or adding a $10 tax to every item in the supermarket).

There is a fundamental logical problem with that suggestion, even though you could as easily say that its just a practical problem of how to motivate customers to stop caring about price.

Or if you prefer, wages. Why doesn't government just tax wages at 100% and then pay for all the great programs that we want to create? Well, because of the logical -- or practical -- problem of motivating workers to work for nothing.
6.29.2007 8:59pm
Mark Field (mail):

people like to set the line between "the right" and "the left" in such a way to make their own views look somewhere close to the center.


I call this "political parallax".
6.29.2007 9:00pm
Sasha Volokh (mail) (www):
SenatorX: Concepts like the free flow of information and the accuracy of the resulting values and not having distortions are important. I merely deny that they have anything to do with "libertarianism." You may think that stuff is required to have markets with various desirable properties, but "libertarianism" refers to a philosophy that advocates a state of liberty, not a philosophy that advocates accurate prices and opposes distortions. (The two concepts aren't unrelated, but they are distinct.)

Incidentally, even if the Hayek quote can be read to support antitrust -- not clear that it does -- Hayek conceded a lot of things in The Road to Serfdom, in his early '40s context, that are non-libertarian. (He himself said this later in life, as have many others.)

ATRGeek: If you're saying what I think you're saying -- that it's not interesting to discuss how people use terms, because usage isn't relevant to meaning, and that bringing it up is tantamount to Godwin's Law -- that sounds kind of outrageous to me. I don't even know how else one can argue that people are mistaken when they use a word, because I don't know what else it means to talk about what a word means.

And if one can't argue, based on one's own experience of how words are used, that someone's use of a term is incorrect, then that pretty much makes a huge chunk of important intellectual argument impossible, since then everyone can argue about "libertarianism" or "socialism" or anything else using their own idiosyncratic understandings of what the word means.

Everyone can always say "you're using the word wrong," and it's never a proper response to say, "oh, so do you claim to have comprehensive knowledge?" Because everyone can rightly rely on their own perception of the usage of a term based on their own readings and experiences, and then the argument is about who's readings and experiences are more representative of how the term is actually used.

Otherwise, we're in a situation where SenatorX can say "libertarians are wrong to oppose antitrust because antitrust helps efficient markets and libertarianism supports efficient markets," and I'm foreclosed from saying "you're wrong about what libertarianism requires, because what you're calling 'libertarianism' isn't what 'libertarianism' means." Instead, I'm what, either supposed to passively accept his characterization of libertarianism, or let it all slide because I don't want to engage him? That's what sounds not terribly interesting to me.
6.29.2007 9:28pm
SenatorX (mail):
Sasha I am glad you are engaging us on this. Questioning what libertarianism is or isn't a very valuable discussion!

"You may think that stuff is required to have markets with various desirable properties, but "libertarianism" refers to a philosophy that advocates a state of liberty, not a philosophy that advocates accurate prices and opposes distortions. (The two concepts aren't unrelated, but they are distinct.) "

Ahh this is exactly what I am saying. If the State exists then it has a relationship to the Citizen. "Liberty" is directly proportional to the choices I have as a citizen. The choice to purchase various goods is a liberty. Any coercion by the State that restricts that right is by definition not-liberty. Competition as opposed to price fixing is liberty as opposed to oppression.

I am not just saying that's my definition I believe there is a valid argument there, logical and contextual.
6.30.2007 12:03am
liberty (mail) (www):

The choice to purchase various goods is a liberty. Any coercion by the State that restricts that right is by definition not-liberty.


Ah, but coercion by the state to restrict some freely offered choices is quite different from active use of coercion by the state in order to "promote" competition, which may require supression of other freedoms (such as firms' freedom to make contracts with each other that keep away competitors).

But, I shall refrain from joining this discussion.

I will wait and see whether there is more discussion about market socialism.
6.30.2007 12:56am
Sasha Volokh (mail) (www):
SenatorX -- In the first place, I think we should clear up what may be a misunderstanding -- you say "coercion by the State . . . is by definition not-liberty," but collusion in the antitrust sense (as I've said above) almost never has any state involvement. Sometimes the state is involved in the trivial and neutral sense that it enforces a collusive contract, like it would enforce any other contract; but antitrust laws even prohibit collusive arrangements that aren't contracts but are just informal arrangements.

So either you should explain to me why you brought in the "coercion by the State" business -- we agree on this but there's no coercion by the State in the typical antitrust case -- or you can take my friendly amendment, by which I understand you to be saying that "coercion" or "not-liberty" could also happen even when other private people prevent you from exercising a choice by the mere act of not offering it to you.

If that's what you're saying, then, as I was saying above, your view of "liberty" is part of a venerable 20th-century tradition that defines liberty not in terms of a formal condition of non-restraint, but in terms of bottom-line possibilities for action. So giving people benefits, like welfare payments, say, that allow them to participate more fully in social life, on this view, can be said to make people "more free."

However, the modern libertarian tradition squarely rejects this view of liberty. It's based, instead, on the more traditional view that liberty is just a formal condition of non-restraint. In other words, liberty is _not_ proportional to the choices you have as a citizen; liberty is, rather, inversely proportional to the physical coercion or fraud you suffer at the hands of others.

You may think that's undesirable, but that's what is meant by libertarianism today -- whether you're talking about the party, the movement, or the general set of ideas. This is why I say that antitrust is antithetical to libertarianism.

You may still argue that antitrust is consistent with "freedom" in your positive-freedom, possibilities-of-action sense. If that's the case, I'll yield the floor to liberty, who will cheerfully argue to you that you're wrong to think that because antitrust doesn't in fact make consumers better off, even when it looks like it might because it seems to have an immediate price-lowering effect.
6.30.2007 1:30am
markm (mail):

I admit I may be missing something but can someone spell out to me (in clear layman's terms) how company's collusion to set price floors helps create competition that benefits consumers?

The usual libertarian argument on antitrust is not that, but rather that government intervention will, on the average, hurt consumers more than such collusion will. Under a government that only protects property rights and enforces contracts[1], if some suppliers artificially jack up the price in any way, soon some other supplier will find that it can greatly increase it's market share by undercutting that price, probably making more on high volume at a low profit margin than it could make at a high profit margin. It's not perfect, but eventually the market will work around attempts to set prices. OTOH, introduce government regulation and you will see collusion between the regulators and certain businesses, with results more harmful than the "price fixing" it attempts to correct.
6.30.2007 2:52pm
SenatorX (mail):
markm I do understand that argument and to some extent I agree with it especially in regards to a conservative approach to action (to avoid slippery slope problems for one thing). I do not think the conclusion you mention necessarily follows to a greater extent for all forms of regulation.

I am going to try and narrow my focus down a bit. What if I said what is libertarian is a value hierarchy principle that puts Individuals at the top, then groups/businesses with the State being the biggest most powerful business around. Socialism is the State valued first then Individuals with the Fascism flavor being State/Business then Individuals.

Government is empowered by individuals to be the biggest bully business around. Why? Only one reason, to act in a way that is best for the Individuals of the state. This is the guiding principle but the APPLICATION of laws must use The Rule of Law. Yes I agree 100% less is better, at little state action as possible BUT where the two CAN be achieved it is desirable. (I really wish the state would make/enforce a law to keep mercury out of our vaccines)

I think Sasha's form of libertarianism is somewhat of a "wolf in sheep's clothing" kind. The focus of contract enforcement to exclusion of the guiding principles is just opening the door to fascism. Any attempt to equate the rights of a business with an individual is to deviate from what is most important.
6.30.2007 4:39pm
SenatorX (mail):
"Ah, but coercion by the state to restrict some freely offered choices is quite different from active use of coercion by the state in order to "promote" competition, which may require supression of other freedoms (such as firms' freedom to make contracts with each other that keep away competitors)."

Exactly. On the second, that state does that that right because that's it's purpose. Why else would it exist? Did "firm's" create the government to protect their rights? Interesting.
6.30.2007 4:44pm
liberty (mail) (www):
Sen X,

sorry, I should have said "individual's rights to make contracts with each other that keep away competition"

You think the government exists to suppress the freedom of individuals to voluntarily enter into contracts with each other? That is the government's purpose?
6.30.2007 5:34pm
Roger Sweeny (mail):
SenatorX,

Mercury has been out of vaccines for several years now. Though just about all the studies that have been done say there is no problem, a lot of people don't believe it and vaccine manufacturers would rather avoid the bad publicity and law suits.
6.30.2007 6:59pm
SenatorX (mail):
liberty, fair enough. In some cases yes I do.

Sorry Roger Sweeny you have been lied to. Thimerisol(50% mercury preservative) is in your FLU shots still for one thing. Second the existing vaccines were not taken off the shelf when they decided that several years ago. Third they still use them for sending to developing nations. Fourth even the non-thimerisol vaccines "may contain trace thimerisol from the manufacturing process".

Last, what lawsuits?

"On five separate occasions, Frist has tried to seal all of the government's vaccine-related documents -- including the Simpsonwood transcripts -- and shield Eli Lilly, the developer of thimerosal, from subpoenas. In 2002, the day after Frist quietly slipped a rider known as the "Eli Lilly Protection Act" into a homeland security bill, the company contributed $10,000 to his campaign and bought 5,000 copies of his book on bioterrorism. Congress repealed the measure in 2003 -- but earlier this year, Frist slipped another provision into an anti-terrorism bill that would deny compensation to children suffering from vaccine-related brain disorders"

As the parent of an autistic child this I can promise. We simply wont ever give up and no matter what lies are told the truth (and help for treatment) will eventually come out. Those studies I believed too and look where that got me. On close look at them they are crap. Bad science and compromised through and through.
6.30.2007 9:54pm
ATRGeek:
Senator X,

I don't disagree with the propostion that command economics (the government doing things like setting prices or output levels) is generally problematic. But just because it is problematic doesn't make it socialism.

liberty,

Obviously, there is a lot more to economics than pure logic, because it incorporates observations and empirical data. In any event, again I am the wrong person to ask to defend the practicality of market socialism, since I don't believe it is practical (although as an aside, I would note I don't think it is so much the day-to-day operation of firms that requires a "profit motive"/ownership--wages can more or less do that job--but I think the practical problems associated with a lack of ownership become insurmountable when you get to the level of allocating resources between firms).

Sasha,

Of course, people also object to Godwin's Law on the basis that sometimes Nazi analogies are appropriate. That is true, of course, but it rather misses the point of Godwin's Law, which is essentially that Nazi analogies are overused and generally (but not always) a sign that the person offering the analogy has run out of interesting things to say in defense of their views.

I think it is the same with academics who start doing armchair lexicology. There are rare occasions on which that might be worth doing. But usually they are doing it because they have run out of useful things to say in defense of their views.

And that is what I think happened here. Your argument for why libertarians should have an exclusive right to the term "free markets" is not only unsupported (you have done nothing but make bare assertions about the most common use of the term), but actually downright silly (since there is no generally valid theorem that it is a mistake to use a term in anything but the most common way--although I suppose that would make for much shorter dictionaries).

Now, if you wanted to argue that in substance, the libertarian version of free markets is the best version of free markets, that would be interesting. But for whatever reason, you chose to restrict yourself to a silly, not substantive, point.
7.1.2007 3:01am
SenatorX (mail):
"I don't disagree with the proposition that command economics (the government doing things like setting prices or output levels) is generally problematic. But just because it is problematic doesn't make it socialism."ATRgeek

Yes but perhaps I could just say "command economics is socialism" and bypass that logic problem. The competition principle is at core the opposite of socialism/fascism/communism/command economics. As far as I can tell all share common traits that are totalitarian in nature. I am not sure you can separate the ideology of socialism from its application. The ideology is almost centered around "equality for all". Other similar themes are used but it's a selling of an idea to the masses of a better world. The root problem is in the APPLICATION of these ideas especially in the economic sense.

They are all totalitarian in nature because in application if the state (be it from an "assigned" dictator or a committee) is to set prices, set production, or set distribution it can only succeed by limiting choices for its citizens, period. The you get fed but its long lines for few choices. I think further the evidence so far is that the concept of a "mixed market" you have discussed so far does not work. Or rather doesn't work as well as the alternative.

There are many (like me) who argue that the government's intervention in areas of the free market are the cause of many "distortions". An easy example would be the "ownership society" advocated recently with the help of Government Sponsored Entities (GSEs) like fannie mae and freddie mac. The distortion is the colossal price appreciation in home values far outside both historical norms and affordability.

I would also like to point out Venezuela and Zimbabwe because if you are interesting in socialist failure we have real life examples happening for us. They really are classic examples and I wish more were interested in this stuff. One of my biggest fears is that the "free market" gets blamed for all these "socialist imbalances" and the people's answer will be more socialism as the fix.
7.1.2007 12:52pm
ATRGeek:
Senator X,

Again, this distinction between command economics generally and socialism proper is mostly just a semantic issue, so I am inclined to let it rest. But I will note this: I don't think you are doing yourself any favors on the political front by labeling any element of a command economy "socialism" (or "communism", "totalitarianism", or so on). You may think of that as justifiably waving a red danger flag, but I think in many contexts you will end up marginalizing yourself more than your opponents. In other words, I think a good number of people might not listen to your substantive points and evidence because of your choice to brand your opponents with such rhetoric.
7.1.2007 6:33pm
SenatorX (mail):
ATRGeek, I hear you and you're probably right. I do think though that I am not just talking out my ass.
7.1.2007 8:30pm
Waldensian (mail):

As the parent of an autistic child this I can promise. We simply wont ever give up and no matter what lies are told the truth (and help for treatment) will eventually come out. Those studies I believed too and look where that got me. On close look at them they are crap. Bad science and compromised through and through.

I'm the parent of two children with autism. For now, let's hold to one side your criticism of "those studies" that find no evidence for an autism/vaccine link. Instead, I would be grateful if you would identify the most persuasive study or studies supporting the theory that vaccines have caused autism.
7.1.2007 11:21pm
Roger Sweeny (mail):
SenatorX,

Thanks for the info. I ran across this this morning. You've probably seen it, but FWIW:

http://www.slate.com/id/2169459/nav/ais/
7.2.2007 10:48am
SenatorX (mail):
What a lousy article Roger it's not worth much. Even if all that was true it doesn't help one bit. Yes I have heard all that many times in the past 3 years. Let's see I've heard:

It's the mother's fault (Refrigerator Mothers)
It's the father's fault (older fathers have autistic kids)
It's over diagnosis (oh yes this common smug one though nobody can explain why a specific moving demographic has the "disease", i.e. where are all the 30 year old autistics?)
It's the parents job that's at fault (parents that work around technology have kids with autism)
It's the TV (parents that let their kids watch TV are to blame)

Anyway now that I have exposed you to the possibility you can look into it yourself or not. If you choose some sort of low energy denial and move on that's your business. If any babies of your family get autism and it does turn out to be linked to the vaccines. Well, that's your business as well.

Waldensian, fair enough. I am still hunting for good studies and honestly the very point is that they are hard to find. Why is that exactly? Is it too much to ask that good studies by non-compromised scientists and doctors be done? By compromised for example one of the two main studies used often to prove no link was done by a Dr. who at first proclaimed he was shocked by the linkage in the data but by the time he released the study there was no link. Much later it was found halfway through the study he started working for one of the big drug companies but this was not disclosed. That's the sort of stuff that doesn't allow us to move past the possibility of a vaccine connection.

I am not saying it is a proven connection but I am suspicious of all the anti-vaccine propaganda. For example I was stunned when looking into chelating as a possible treatment to read all the horror stories. After I found the details about the one death I was even more amazed at all the lies I found coming out of supposed professionals mouths warning about the dangers.

There is a lot of data that lines up the possibility of the thimerisol and autism link and in my opinion there is enough that I want to see transparent studies. I do not want one study done by those on the drug maker payroll and to declare the case closed with no further studies necessary.

Why does the diet affect autistic children? Why are their heads larger? Why do they have the white matter inflammation? Do autistic children expel metals more than normal children when chelated? What are the actual stats for chelation success rates? Why do Amish children not have autism?

There are a lot of valid questions that could be determined with good science. Nobody is going to accept anything that isn't transparent and independent though. Saying that everyone like this is a hysterical woman who is latched onto hope doesn't help. If you are the parent of an autistic child (or two) you would know how your hope has been crushed and revived so many times that it's hardly the point anymore. The point is we are cynical and while we see the profit motive against finding a link between autism and vaccines we don't see an equivalent force yet to counter balance that. Cynicism and looking into everything yourself and experimenting with treatments seem to be our best resource.

Every article and study I have seen on both sides has been shredded six ways from Sunday so the only answer to that I hope is better, more transparent, and more independent studies. Here is one though done last year that suggest a possible link.

http://www.aapsonline.org/press/nr-03-02-2006.php
7.2.2007 3:19pm

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