INTRODUCTION OF H.R. 1789
HON. RON PAUL
OF TEXAS
IN THE HOUSE OF REPRESENTATIVES
Tuesday, May 18, 1999
1999 Ron Paul 49:1 Mr. PAUL.
Mr. Speaker, I rise today to enlist
support for a bill I have introduced to repeal
statutes which have now resulted in more than
one hundred years of government intervention
in the marketplace. In 1890, at the behest of
Senator Sherman, the Sherman Antitrust Act
was passed allowing the federal government
to intervene in the process of competition,
inter alia, whenever a firm captured market
share by offering a better product at a lower
price. The Market Process Restoration Act of
1999, H.R. 1789, will preclude such intervention.
1999 Ron Paul 49:2 Antitrust statutes governmentally facilitate
interference in the voluntary market transactions
of individuals. Evaluation of the antitrust
laws has not proceeded from an analysis
of their nature or of their necessary consequences,
but from an impressionistic reaction
to their announced gain.
1999 Ron Paul 49:3 Alan Greenspan, now Chairman of the Federal
Reserve, described the “world of antitrust”
as “reminiscent of Alice’s Wonderland:
Everything seemingly is, yet apparently isn’t,
simultaneously.” Antitrust is, according to
Greenspan “a world in which competition is
lauded as the basic axiom and guiding principle,
yet, ‘too much’ competition is condemned
as ‘cutthroat’. * * * A world in which
actions designed to limit competition are
branded as criminal when taken by businessmen,
yet praised as ‘enlightened’ when initiated
by government. A world in which the law
is so vague that businessmen have no way of
knowing whether specific actions will be declared
illegal until they hear the judge’s
verdict — after the fact.” And, of course, obscure,
incoherent, and vague legislation can make legality
unattainable by anyone, or at least unattainable
without an unauthorized revision
which itself impairs legality.
1999 Ron Paul 49:4 The Sherman Act was a tool used to regulate
some of the most competitive industries in
America, which were rapidly expanding their
output and reducing their prices, much to the
dismay of their less efficient (but politically influential)
competitors. The Sherman Act, moreover,
was used as a political fig leaf to shield
the real cause of monopoly in the late
1880’s—protectionism. the chief sponsor of
the 1890 tariff bill, passed just three months
after the Sherman Act, was none other than
Senator Sherman himself.
1999 Ron Paul 49:5 One function of the Sherman Act was to divert
public attention from the certain source of
monopoly — Government’s grant of exclusive
privilege. But, as George Reisman, Professor
of Economics at Pepperdine University’s
Graziadio School of Business and Management
in Los Angeles, explains
“everyone, it
seems, took for granted the prevailing belief
that the essential feature of monopoly is that
a given product or service is provided by just
one supplier. On this view of things, Microsoft,
like Alcoa and Standard Oil before it, belongs
in the same category as the old British East
India Company or such more recent instances
of companies with exclusive government franchises
as the local gas or electric company or
the U.S. Postal Service with respect to the delivery
of first class mail. What all of these
cases have in common, and which is considered
essential to the existence of monopoly,
according to the prevailing view, is that they
all represent instances in which there is only
one seller. By the same token, what is not
considered essential, according to the prevailing
view of monopoly, is whether the sellers
position depends on the initiation of physical
force or, to the contrary, is achieved as
the result of freedom of competition and the
choice of the market.”
1999 Ron Paul 49:6 Microsoft, Alcoa,and Standard Oil represent
cases of a sole supplier, or at least come
close to such a case. However, totally unlike
the cases of exclusive government franchises,
their position in the market is not (or was not)
the result of the initiation of physical force but
rather the result of their successful free competition.
That is, they became sole suppliers
by virtue of being able to produce products
profitably at prices too low for other suppliers
to remain in or enter the market, or to produce
products whose performance and quality others
simply could not match.
1999 Ron Paul 49:7 Even proponents of antitrust prosecution acknowledge
this. In the Standard Oil case, the
U.S. Supreme Court declared in its 1911 decision
breaking up the company:
“Much has been said in favor of the objects of the Standard
Oil Trust, and what it has accomplished. It may be true that it has improved the quality
and cheapened the costs of petroleum and its products to the consumer.”
1999 Ron Paul 49:8 It is the dynamic model of competition under
which only “free” entry is required that insures
maximization of consumer welfare within the
nature-given condition of scarcity and reconciles
the ideal of pure liberty with that of
economic efficiency. The free market in the
world of production may be termed “free competition”
or “free entry”, meaning that in a free
society anyone is free to compete and
produce in any field he chooses. “Free competition”
is the application of liberty to the
sphere of production: the freedom to buy, sell,
and transform one’s property without violent
interference by an external power.
1999 Ron Paul 49:9 As argued by Alan Greenspan, “the ultimate
regulator of competition in a free economy is
the capital market. So long as capital is free
to flow, it will tend to seek those areas which
offer the maximum rate of return.”
1999 Ron Paul 49:10 The purpose of my bill is to restore the inherent
benefits of the market economy by repealing
the Federal body of statutory law
which currently prevents efficiency-maximizing
voluntary exchange.
Notes:
1999 Ron Paul 49:1
at the behest of Senator Sherman
Here, Ron Paul refers to United States Senator John Sherman (R-Ohio).
1999 Ron Paul 49:4
the chief sponsor probably should be capitalized: The chief sponsor.
1999 Ron Paul 49:5
first class mail is a registered trade mark and should also be hyphenated:
First-Class Mail®.
1999 Ron Paul 49:5
the sellers position probably should be possessive: the seller’s position.
