In the Name of Competition

This past Sunday, the Chronicle editorial board revealed how confused and unprincipled it is. An editorial called for the federal government to use antitrust laws to block Amazon’s purchase of Whole Foods.

Amazon’s business model is to become a monopoly. Buying Whole Foods gives the online retailer its first major foothold in the brick-and-mortar grocery business….

However, the real challenge is in addressing the underlying problem of a political and economic order that not only allows anti-competitive behavior, but even encourages it.

As examples of policies that encourage anti-competitive behavior, the paper cites the tax code, the influence of lobbyists, and occupational licensing. These examples have one fundamental thing in common: each involves government intervention in the economy. And so do the antitrust laws.

In other words, the editorial bemoans the results of government intervention and then calls for more intervention as a solution.

The examples of cronyism cited by the paper certainly stifle competition. The tax code rewards us with a lower tax burden if we engage in the types of activities that government officials deem desirable, such as purchasing an electric car or installing solar panels. Lobbyists frequently seek legislation that prevents upstarts from competing with established companies. As examples, auto dealerships and beer distributors lobbied the recent legislature to prohibit certain types of competition. Occupational licensing is used to erect outrageous barriers to entering a profession.

Antitrust laws prevent companies from engaging in activities that the government deems anti-competitive, such as earning too large of a market share. Government intervention is “justified” as necessary to protect consumers and promote the “public interest.” The “public interest” is the same justification that is used to defend the tax code, the influence of lobbyists, and occupational licensing.

The paper’s editorial board is unable to see this similarity because it does not think in principles. It sees problems, whether real or imagined, as isolated issues. It is unable to identify the fundamental ideas that underlie seemingly disparate issues.

For example, the paper’s columnists have repeatedly decried Uber’s attempts to escape the draconian regulations that stifle the taxi industry. The paper wants Uber to be subjected to the same licensing requirements as taxi companies. So, while decrying occupational licensing, the Chronicle wants taxi licensing. Having rejected principles, the paper can’t see that both violate an individual’s moral right to act on his own judgment and offer his services to willing buyers.

In truth, all government intervention–including the antitrust laws–is anti-competitive.

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