I found myself in complete agreement with Donald W. Livingston’s (and thus Thomas Naylor’s) arguments for downsizing the U.S.A. (“A ‘Containment Policy’ for the New Cold War,” Vital Signs, May). The very next article, however, left me bewildered (“What’s Good for General Motors . . . ,” Vital Signs). It was hard to believe that it appeared in the same publication. David Hartman, outraged at the monopolists in our midst, has a solution: Let the government’s crusading antitrust boys take care of those greedy capitalists! Yes, the very same government that, for over 200 years, has enforced that bureaucratic, bloated, inefficient, and corrupt supermonopoly, the Post Office. I invite Mr. Hartman to conduct an experiment by setting up two businesses: a software company to produce a computer operating system and a mail company to distribute first-class letters.
If he succeeds in the former, he will be rewarded by the public with nice profits. True, he will have to compete against Microsoft, but it’s not an impossible mission, as a few other operating systems have demonstrated. They don’t have the enormous sales that Microsoft has, but they are there and available for anyone who wants them. For all of his power, Bill Gates can’t get them off the market. But if Mr. Hartman succeeds in the latter, by establishing an efficient alternative to the Post Office, he will be rewarded by a few years in prison. Unlike Bill Gates, the U.S. government will send its thugs after Mr. Hartman for having the temerity to compete with their official monopolist. That, Mr. Hartman, is the difference between government and the private sector. There can be no permanent monopoly without government enforcement.
Mr. Hartman Replies:
Mr. Sideris raises one valid question (Should the U.S. government monopolize the U.S. mails?) and begs another (Can a monopoly exist without government enforcement?).
The first question is a diversion from the central question of my article: Does bigger mean better when it comes to economic organization? As such, I shall only note that the organization of the delivery of the U.S. mail is not simply a question of privatization versus socialism.
The legal and policing powers that secure the safe circulation of monetary and legal instruments are plausible justifications for control of the mail service by the U.S. government. The real issue is not cost efficiency (as demonstrated by UPS). Ideally, the federal government would continue operating its current postal service for those who prefer to use it, while allowing for private competition.
Mr. Sideris’s assertion that monopoly cannot exist without government enforcement is not self-evident and, even if proved true, would not be a sufficient basis for discrediting legal restriction of anticompetitive practices.
Our principal antitrust laws—the Sherman Antitrust Act and the Robinson-Patman Act—delineate anticompetitive practices in general and predatory pricing practices in particular. Whether or not you agree with them, these acts are part of U.S. commercial law. To propose that Microsoft be exempted from these laws is to propose that we enforce the law selectively. Microsoft used connectivity as a barrier to competitive software and, in so doing (much as IBM had done in past), effectively and illegally restrained competitive trade.
Do the Sherman Antitrust Act and the Robinson-Patman Act unnecessarily interfere with the privileges of successful entrepreneurs, since, many claim, no monopoly will last forever and, thus, they are entitled to whatever profits the market may allow in the interim? As the advance of socialism throughout the 20th century has shown, if successful entrepreneurs are allowed to collude or connive to prevent the emergence of legitimate competition in order to enlarge or prolong their profits, citizens will look for alternative economic organization, efficient or not, in protest of what amounts to monopoly taxation added to the prices of their goods and services.
To allow Microsoft or any other dominant competitor to restrain trade lowers technological progress, consumer choice, optimal price, and overall economic efficiency. Most importantly, it diminishes the public’s faith in the efficacy of free markets.