19 April 2011

Ron Paul
1999 Ron Paul Chapter 49

Introduction of H.R. 1789

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18 May 1999

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.

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.

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