Tuesday, March 02, 2004

Landes On Coase On Antitrust

Again, sorry to bait our porn-hungry readers with the title. But check out this gem from William Landes, best known as my Trademarks professor:

"Ronald [Coase] said he had gotten tired of antitrust because when the prices went up the judges said it was monopoly, when the prices went down they said it was predatory pricing, and when they stayed the same they said it was tacit collusion." (from Law And Economics Blog)

I think that summarizes my experience with Antitrust pretty nicely - every business activity receives a label with a negative connotation. This label leads some court to tell some business to stop doing something because the activity is "per se" illegal. Or even worse, the activity is subject to the "rule of reason," which means the activity is illegal when a judge feels like it, and they don't have to give a reason. I mean, can't you tell from the nasty name that what you did is bad?

Imagine if the real world was like Antitrust law:

"You there, what are you doing with those kids of yours? You impart your life's wisdom on them while living together? Sounds like a cartel! Shame! You work while they go to school? Why, that's market allocation! Double shame! You don't let them see R-rated movies? You're a bunch of group boycotters too! Let me guess, let me guess: You married their mother (tying), had children (facilitating practices), and then her refusal to have sex with you (denial of essential facility) caused you to divorce her (refusal to deal)? I've heard enough.

What? Why am I not picking on your former employer, who won't let you work due to a covenant not to compete? Because that's an ancillary restraint, dumbass. You clearly don't understand Antitrust."

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