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Tuesday, July 1, 2008

Oppose Internet Regulation

"In the wake of an online advertising partnership between Yahoo! and Google, a House subcommittee held a hearing on the possibility of increasing Internet regulation to prevent the companies from gaining dominance over that area of the Internet. Small Business Regulations chairman Charles Gonzalez worried that the partnership could be bad for online competition."

I wrote the following to my representatives using http://www.congress.org/ (the quote I use is taken from "Antitrust" in "Capitalism: The Unknown Ideal")

I OPPOSE regulation of Internet commerce.

"The necessary precondition of a coercive monopoly is closed entry—the barring of all competing producers from a given field. This can be accomplished only by an act of government intervention, in the form of special regulations, subsidies, or franchises. Without government assistance, it is impossible for a would-be monopolist to set and maintain his prices and production policies independent of the rest of the economy. For if he attempted to set his prices and production at a level that would yield profits to new entrants significantly above those available in other fields, competitors would be sure to invade his industry."

The idea that the Yahoo!, Google partnership will be "bad" for competition is a red herring designed to justify ever more government intrusion into the marketplace. Rather than increasing regulation of business, the House should hold hearings on decreasing regulation of business. Specifically, the Congress should repeal the Sherman Anti-Trust Act and various other "antitrust" laws which arbitrarily punish successful businesses for being successful and stifle efficiency and productivity by preventing mergers and acquisitions.

If the government is truly concerned about lack of competition, it could start by investigating the U.S. Post Office, the Department of Education, and the Department of Transportation which restrict competition in mail delivery, education, and the ownership and maintenance of roads and bridges respectively. If "fair competition" is truly the goal then why has the government granted monopoly privileges in these areas - areas which so obviously are in need of the benefits of privatization and competition?

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