Antitrust laws came into being in the United States in 1890 with the passage of the Sherman Antitrust Act, named after the Republican Senator who introduced it. Also referred to as competition laws, the bill was purported to be an act which would prevent monopolies and other forms of unfair competition in the market place. What it did was create the only real monopolies as we think of them, by allowing the government to pick and choose the winners in business, as opposed to the free market. Now business did not have to rely on solid proven business tactics and belt tightening, balanced with expansion and innovation. Instead, now all a company had to do was buy off the right politicians, and they would be a main competitor (if not the only competitor) due to the crippling legislation the bought-off-lawmakers would invoke.
The Sherman Act was said to empower government to regulate business for the public good, but it instead allows politicians to extort business, forcing them to pay “protection money” in order to receive the proper permits, licenses, and comply with other government regulations. There are enough of these regulations and stipulations in the Sherman Act to ensure that whatever a business is doing will in one way or another violate the antitrust laws: “if he charges prices which some bureaucrats judge as too high, he can be prosecuted for monopoly, or rather, for a successful `intent to monopolize’; if he charges prices lower than those of his competitors, he can be prosecuted for `unfair competition’ or `restraint of trade’; and if he charges the same price as his competitors, he can be prosecuted for `collusion’ or `conspiracy’” -Ayn Rand, America’s Persecuted Minority: Big Business. Politicians have even argued against clarifying these laws because the elastic interpretation is good for the politician, but very bad for business (and therefore the economy, and employment).
Ayn Rand takes on anti-trust laws in a lecture she gave called America’s Persecuted Minority: Big Business. Here Ayn Rand points out that businessmen are a minority and that people discriminate against this minority in ways we would consider disgusting if it were directed towards a racial minority. She also points out that “government holds a legal monopoly on the use of physical force”. Business cannot get at you, government can. Business relies on your choices to make them powerful; government forces you to make them powerful. Business cannot come into your home and arrest you, government can. The only way business can use force against an individual is if business and government are one; anti-trust laws are the first step to allowing business the access to the force of the government. Business can now pay off a politician whether illegally or through campaign contributions, and have that politician bring antitrust charges against a competitor of that company.
In 1945 the Associated Press was found guilty under antitrust laws because they had certain restrictions about who could join the association, therefore it was ruled that smaller newspapers starting up did not have the same opportunity as the AP, so the AP had to share what they had earned and built over time with anyone who woke up and decided to start a newspaper.
In 1951 it was found that movie distributors violated antitrust laws of collusion, because they all denied first access of their movies to drive-in movie theaters.
The Aluminum Company of America was guilty of violating anti-trust laws because they excluded competitors by consistently enlarging their facilities and ensuring shipments of materials so as to keep up with demand and still supply metal at a low price–i.e. running a successful business.
In an attempt to follow antitrust laws General Electric charged the same prices as its smaller competitors even though it could easily have charged lower prices and put the small companies out of business. GE and about 25 other electric companies were then taken to court for this “conspiracy to set prices”. Turns out a government agency had legally fixed these prices during WWII, but when that government agency was ended after the war these companies continued to engage in the same activity, but now it was illegal because it was corporations setting the price instead of government. Businessmen got jail time, and one killed himself on the way to prison. Antitrust laws ruin people’s lives and businesses, stifle the economy and impede what under laissez-faire capitalism would be an ever skyrocketing standard of living.
Antitrust laws are largely ignored in media today; no one really seems to talk about them, know exactly what they are, or see how terrible these laws are for businesses and individuals. Despite claims to the contrary, they do not help promote competition and do not protect against unfair business tactics. The free market will protect individuals and businesses better than the antitrust laws ever could. Any politician in favor of these laws is certainly not a supporter for business or individual freedom. We need to bring this debate to light and force politicians to repeal these harmful laws. With the shackles cut from the wrists of business we will see exponential innovation which will produce a higher standard of living for everyone [Read my recent article, “An Economy Absent of Force”]. So quick are some to bite the hand that feeds.