But Peritz is to economics what Al Gore is to environmental science: He seems to think that a corporation whose assets exceed the personal wealth of a worker has greater bargaining power than the worker. Indeed, it is only because several massive conglomerations of assets exist that Simpson enjoys as much bargaining power as he does. Any A student in the same economics class could scold Peritz for asserting that free markets exist only when bargaining power is equal.
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If Simpson had, by some measure, less bargaining power than large firms, this condition would be unfortunate for Simpson. However, this inequality by itself would not mean that the market is not free.
Competition Policy in America, History, Rhetoric, Law
Free markets exist whenever some minimum respect for private property rights prevails and government does not interfere with the peaceful use and voluntary exchange of these rights. As long as humans exist, each will have ample opportunity for mutually advantageous exchanges with others. Bargaining power determines only the distribution of the resulting gains from trade. Nothing in either the theory or the practice of free markets requires that the gains from trade always, or even generally, be divided equally.
Specifically, the book is a legal history of competition law and policy in the United States since But it is a peculiar history.
It is a history only of lawyerly words. He serves them up here. But this meal is the potato without the steak. Rockefeller and Standard Oil, of Gustavus Swift and the Chicago meatpackers, of unfair competition and predatory pricing, and of mergers, monopolies, and price fixing. Peritz, though, never checks the lawyerly rhetoric against real-world facts. For him, sufficient proof that private monopolies were a constant threat to consumers and workers is furnished by the fact that politicians, bureaucrats, and judges spoke as though monopolies were such a threat.
Consequently, having acquired all his knowledge of economic history from reading congressional debates and court opinions, Peritz knows virtually no economic history. Peritz repeats the popular myth that Standard Oil practiced predatory pricing.
In fact, real wages rose during this era as output grew impressively. Furthermore, as Thomas DiLorenzo has shown, in the s in the industries singled out in congressional debates as being monopolized, outputs increased faster than aggregate output in the booming economy. Likewise, real prices charged by firms in these allegedly monopolized industries fell. None of these facts are reconcilable with what Peritz thinks he knows about the economy.
Not only is Peritz wholly misinformed about actual economic history, but even his history of legal rhetoric is marred by embarrassing mistakes. New York ; rather than for Dr.
According to practitioners of this sophistry, all seemingly voluntary interpersonal acts in an orderly society rest ultimately upon government sanction. Thus, there is no such thing as truly voluntary interpersonal relationships. Note how Peritz justifies the assertion that all contracts involve coercion:.
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The difficulty lay in the very relationship between coercion and freedom of contract. Competition Policy in America: Americans have long appealed to images of free competition in calling for free enterprise, freedom of contract, free labor, free trade, and free speech.
Competition Policy in America, 1888-1992: History, Rhetoric, Law
This imagery has retained its appeal in myriad aspects of public policy--for example, Senator Sherman's Anti-Trust Act of , Justice Holmes's metaphorical marketplace of ideas, and President Reagan's rhetoric of deregulation. In Competition Policy in America, , Rudolph Peritz explores the durability of free competition imagery by tracing its influences on public policy. Looking at congressional debates and hearings, administrative agency activities, court opinions, arguments of counsel, and economic, legal, and political scholarship, he finds that free competition has actually evoked two different visions--freedom not only from oppressive government, but also from private economic power.
He shows how the discourse of free competition has mediated between commitments to individual liberty and rough equality--themselves unstable over time. This rhetorical approach allows us to understand, for example, that the Reagan and Carter programs of deregulation, both inspired by the rhetoric of free competition, were driven by fundamentally different visions of political economy. Peritz's historical inquiry into competition policy as a series of government directives, inspired by two complex yet distinct and sometimes contradictory visions of free competition, provides an indispensable framework for understanding modern political economy-- whether political campaign finance reform, corporate takeover regulation, or current attitudes toward the New Deal Legacy.
Competition Policy in America will be of great interest to lawyers, historians, economists, sociologists, and policy makers in both government and business. Free Competition and Freedom of Contract.