here's more material on this subject not behind a paywall:
For an Austrian critique of neoclassical monopoly theory, see Anderson, et. al., 2001; Armentano, 1972, 1982, 1989, 1999; Armstrong, 1982; Barnett, et. al., 2005, 2007; Block, 1977, 1982, 1994; Block and Barnett, 2009; Boudreaux and Costea, 2003; DiLorenzo, 1992, 1996; DiLorenzo and High, 1988; Henderson, 2013; High,1984-1985; Hull, 2005; McChesney, 1991; McGee, 1958; Rothbard, 2004; Shugart, 1987; Smith, 1983; Tucker, 1998A, 1998B
Anderson, William, Walter E. Block, Thomas J. DiLorenzo, Ilana Mercer, Leon Snyman and Christopher Westley. 2001. “The Microsoft Corporation in Collision with Antitrust Law,” The Journal of Social, Political and Economic Studies, Vol. 26, No. 1, Winter, pp. 287-302
Armentano, Dominick T. 1972. The Myths of Antitrust, New Rochelle, N.Y.: Arlington House.
Armentano, Dominick T. 1982. Antitrust and Monopoly: Anatomy of a Policy Failure, New York: Wiley
Armentano, Dominick T. 1999. Antitrust: The Case for Repeal. Revised 2nd ed., Auburn AL: Mises Institute
Armstrong, Donald. 1982. “Competition versus Monopoly: Combines Policy in Perspective.” The Fraser Institute: Vancouver, BC, Canada
Barnett, William, Walter E. Block and Michael Saliba. 2005. "Perfect Competition: A Case of ‘Market-Failure,’” Corporate Ownership & Control. Vol. 2, No. 4, summer, p. 70-75
Barnett, William II, Walter E. Block and Michael Saliba. 2007. “Predatory pricing.” Corporate Ownership & Control, Vol. 4, No. 4, Continued – 3, Summer; pp. 401-406
Block, Walter E. 1977. "Austrian Monopoly Theory -- a Critique," The Journal of Libertarian Studies, Vol. I, No. 4, Fall, pp. 271-279.
Block, Walter E. 1982. Amending the Combines Investigation Act, Vancouver: The Fraser Institute.
Block, Walter E. 1994. "Total Repeal of Anti-trust Legislation: A Critique of Bork, Brozen and Posner, Review of Austrian Economics, Vol. 8, No. 1, pp. 35-70.
Rothbard, Murray N. (2004 [1962]). Man, Economy and State, Auburn AL: Ludwig von Mises Institute, Scholar’s Edition; http://www.mises.org/rothbard/mes.asp
Shugart II, William F. 1987. "Don't Revise the Clayton Act, Scrap It!," 6 Cato Journal, 925
Your piece makes good points, of course, but neglects entirely one that libertarians typically avoid.
Other nations can be enemies of our worldview including our free market ideas. Other nations may be "friends" today but enemies in the future.
The T-shirt sale analogy is inapt. For a family, instead consider that you sell all your cars to a friendly neighbor. Yay, you have the money. The neighbor rents you the car when you want it, at a fair price. Yay.
Then the neighbor gets pissed off, and no longer rents the car to you. Oops. There isn't another neighbor to your rural home for 25 miles. Oops.
Your whole household is now gravely hobbled -- yes, you got the money for selling the cars -- but you became beholden to the neighbor to function efficiently in many areas of life. Did you think that through? What's your plan?
We can generate the usual and true claims that "the market will respond" and so on -- I'm quite familiar with all of these and have made these arguments. But the market does not guarantee you'll get the car or other transportation that you need. We have market forces, not market guarantees.
And the "substitute good" you have to obtain when a seller decides simply to quit selling a needed product to you may be a "good" that is way expensive as well as inferior.
Although a lifelong economic libertarian who has argued for free trade and still does, I nevertheless have come to realize that the free trade "both sides benefit" analysis does not extend far in a world where the buyers and sellers are mortal enemies.
Hey, Britain could have sold all of its armament and airplane factories to German firms in 1939. Good idea?? I think not.
In my view, yes, as you say: “the market will respond” after the fact. However, it will also anticipate the very problem you mention. I think the best antidote to your not unreasonable fear is this brilliant essay:
Dear Walter: Alas, the McGee article is behind a paywall, and I might pay for it if the subject matter were truly applicable. But reading the first page (only one available free) foreshadows a discussion of monopoly power and predatory pricing. I'm familiar with those concepts and the free market responses to them. The Standard Oil case did not involve mortal enemies, one which wanted to conquer or destroy the other and erase the free market economic system. If the U.S. lacks domestic steel production but then faces a military attack (e.g., 12-7-1941), the U.S. cannot rely upon market transactions with now-declared enemies or even friendly nation monopolists to speedily address the life-or-death matter at hand.
here's more material on this subject not behind a paywall:
For an Austrian critique of neoclassical monopoly theory, see Anderson, et. al., 2001; Armentano, 1972, 1982, 1989, 1999; Armstrong, 1982; Barnett, et. al., 2005, 2007; Block, 1977, 1982, 1994; Block and Barnett, 2009; Boudreaux and Costea, 2003; DiLorenzo, 1992, 1996; DiLorenzo and High, 1988; Henderson, 2013; High,1984-1985; Hull, 2005; McChesney, 1991; McGee, 1958; Rothbard, 2004; Shugart, 1987; Smith, 1983; Tucker, 1998A, 1998B
Anderson, William, Walter E. Block, Thomas J. DiLorenzo, Ilana Mercer, Leon Snyman and Christopher Westley. 2001. “The Microsoft Corporation in Collision with Antitrust Law,” The Journal of Social, Political and Economic Studies, Vol. 26, No. 1, Winter, pp. 287-302
Armentano, Dominick T. 1972. The Myths of Antitrust, New Rochelle, N.Y.: Arlington House.
Armentano, Dominick T. 1982. Antitrust and Monopoly: Anatomy of a Policy Failure, New York: Wiley
Armentano, Dominick T. 1989. “Antitrust Reform: Predatory Practices and the Competitive Process.” Review of Austrian Economics. Vol. 3, pp. 61-74. http://www.mises.org/journals/rae/pdf/rae3_1_4.pdf
Armentano, Dominick T. 1999. Antitrust: The Case for Repeal. Revised 2nd ed., Auburn AL: Mises Institute
Armstrong, Donald. 1982. “Competition versus Monopoly: Combines Policy in Perspective.” The Fraser Institute: Vancouver, BC, Canada
Barnett, William, Walter E. Block and Michael Saliba. 2005. "Perfect Competition: A Case of ‘Market-Failure,’” Corporate Ownership & Control. Vol. 2, No. 4, summer, p. 70-75
Barnett, William II, Walter E. Block and Michael Saliba. 2007. “Predatory pricing.” Corporate Ownership & Control, Vol. 4, No. 4, Continued – 3, Summer; pp. 401-406
Block, Walter E. 1977. "Austrian Monopoly Theory -- a Critique," The Journal of Libertarian Studies, Vol. I, No. 4, Fall, pp. 271-279.
Block, Walter E. 1982. Amending the Combines Investigation Act, Vancouver: The Fraser Institute.
Block, Walter E. 1994. "Total Repeal of Anti-trust Legislation: A Critique of Bork, Brozen and Posner, Review of Austrian Economics, Vol. 8, No. 1, pp. 35-70.
Block, Walter and William Barnett. 2009. “Monopsony Theory.” American Review of Political Economy. June/December, Vol. 7(1/2), pp. 67-109; http://www.arpejournal.com/ARPEvolume7number1-2/Block-Barnett.pdf; http://www.arpejournal.com/
Boudreaux, Donald J., and DiLorenzo, Thomas J. 1992. "The Protectionist Roots of Antitrust," Review of Austrian Economics, Vol. 6, No. 2, pp. 81-96
Costea, Diana. 2003. “A Critique of Mises’s Theory of Monopoly Prices.” The Quarterly Journal of Austrian Economics. Vol. 6, No. 3, Fall, pp. 47-62; http://www.mises.org/journals/qjae/pdf/qjae6_3_3.pdf
DiLorenzo, Thomas J. 1996. "The Myth of Natural Monopoly," Review of Austrian Economics, Vol. 9, No. 2, pp. 43-58; http://www.mises.org/journals/rae/pdf/rae9_2_3.pdf; https://mises.org/library/myth-natural-monopoly
DiLorenzo, Tom and Jack High. 1988. "Antitrust and Competition, Historically Considered," Economic Inquiry, Vol. 26, No. 1, pp. 423-435, July.
Henderson, David R. 2013. “The Robber Barons: Neither Robbers nor Barons.” Library of Economics and Liberty. March 4; http://www.econlib.org/cgi-bin/printarticle2.pl?file=Columns/y2013/Hendersonbarons.html
High, Jack. 1984-1985. "Bork's Paradox: Static vs Dynamic Efficiency in Antitrust Analysis," Contemporary Policy Issues, Vol. 3, pp. 21-34.
Hull, Gary, ed. 2005. The Abolition of Antitrust. New Brunswick, NJ: Transaction Publishers
McChesney, Fred. 1991. "Antitrust and Regulation: Chicago's Contradictory Views," Cato Journal, Vol. 10; https://www.cato.org/sites/cato.org/files/serials/files/cato-journal/1991/1/cj10n3-10.pdf
McGee, John S. 1958. "Predatory Price Cutting: The Standard Oil (New Jersey) Case," The Journal of Law and Economics, October, pp. 137-169; https://www.journals.uchicago.edu/toc/jle/1958/1
Rothbard, Murray N. (2004 [1962]). Man, Economy and State, Auburn AL: Ludwig von Mises Institute, Scholar’s Edition; http://www.mises.org/rothbard/mes.asp
Shugart II, William F. 1987. "Don't Revise the Clayton Act, Scrap It!," 6 Cato Journal, 925
Smith, Jr., Fred L. 1983. "Why not Abolish Antitrust?," Regulation, Jan-Feb, 23; http://cei.org/op-eds-and-articles/why-not-abolish-antitrust
Tucker, Jeffrey. 1998A. “Controversy: Are Antitrust Laws Immoral?” Journal of Markets & Morality. Vol. 1, No. 1, March, pp. 75-82; http://www.acton.org/publications/mandm/mandm_controversy_35.php
Tucker, Jeffrey. 1998B. “Controversy: Are Antitrust Laws Immoral? A Response to Kenneth G. Elzinga.” Journal of Markets & Morality. Vol. 1, No. 1, March, pp. 90-94; http://www.acton.org/publications/mandm/mandm_controversy_37.php
Dear Walter,
Your piece makes good points, of course, but neglects entirely one that libertarians typically avoid.
Other nations can be enemies of our worldview including our free market ideas. Other nations may be "friends" today but enemies in the future.
The T-shirt sale analogy is inapt. For a family, instead consider that you sell all your cars to a friendly neighbor. Yay, you have the money. The neighbor rents you the car when you want it, at a fair price. Yay.
Then the neighbor gets pissed off, and no longer rents the car to you. Oops. There isn't another neighbor to your rural home for 25 miles. Oops.
Your whole household is now gravely hobbled -- yes, you got the money for selling the cars -- but you became beholden to the neighbor to function efficiently in many areas of life. Did you think that through? What's your plan?
We can generate the usual and true claims that "the market will respond" and so on -- I'm quite familiar with all of these and have made these arguments. But the market does not guarantee you'll get the car or other transportation that you need. We have market forces, not market guarantees.
And the "substitute good" you have to obtain when a seller decides simply to quit selling a needed product to you may be a "good" that is way expensive as well as inferior.
Although a lifelong economic libertarian who has argued for free trade and still does, I nevertheless have come to realize that the free trade "both sides benefit" analysis does not extend far in a world where the buyers and sellers are mortal enemies.
Hey, Britain could have sold all of its armament and airplane factories to German firms in 1939. Good idea?? I think not.
Respectfully,
-Richard Stevens
Dear Richard:
Thanks for your thoughtful comment on my essay.
In my view, yes, as you say: “the market will respond” after the fact. However, it will also anticipate the very problem you mention. I think the best antidote to your not unreasonable fear is this brilliant essay:
McGee, John S. 1958. "Predatory Price Cutting: The Standard Oil (New Jersey) Case," The Journal of Law and Economics, October, pp. 137-169; https://www.journals.uchicago.edu/toc/jle/1958/1
Best regards,
Walter
Dear Walter: Alas, the McGee article is behind a paywall, and I might pay for it if the subject matter were truly applicable. But reading the first page (only one available free) foreshadows a discussion of monopoly power and predatory pricing. I'm familiar with those concepts and the free market responses to them. The Standard Oil case did not involve mortal enemies, one which wanted to conquer or destroy the other and erase the free market economic system. If the U.S. lacks domestic steel production but then faces a military attack (e.g., 12-7-1941), the U.S. cannot rely upon market transactions with now-declared enemies or even friendly nation monopolists to speedily address the life-or-death matter at hand.