I’ve been hearing alot of news about the Informant book and movie (the one with Matt Damon). Its about the price fixing that took place between various companies involving lycense (some farm product). Does anyone have any information on a libertarian view of this (I tried looking for Dominick Armentano’s thoughts, but I couldn’t find any)? I know the Cato institue has something on them getting corporate welfare, but thats all I could find. Nothing nessecarily on the price fixing problem itself in the early 90s. Could someone point me to somewhere which talks about it?
Anyone? Thanks.
if someone has the right to set the price of his product at a certain level. and he does so. regardless of whether others who have the same right, pitch their prices higher/lower/same. who can complain?
Was this during the 19th century? Some suppliers set up contracts with producers or retailer called “maximum and minumum resale price maintenance”. The practices were attacked by anti-trust legislation, despite the fact the purpose of these contracts was to protect the consumer from hiking prices or undercutting that hurt competition.
This happened around in 1990-1992. I know that a movie is coming out, which will probably make the topic more popular as a defense for antitrust, so I was wondering if anyone had some information on it.
Menger devotes a couple of pretty comprehensive chapters to Monopolies in Principles of Economics… which sounded logical enough. He basically says it’s in the interests of two or more suppliers to collude to obtain the highest price possible, just as it’s in the interests of two or more consumers to collude to get the lowest prices possible.
The only bullet proof defense against this, I think, is the free market (the temptation, on the part of producers, to undercut one another and their inevitable inability to cooperate when there start to be too many of them in the market place). I don’t see how you could substitute government regulation for that built in protection provided by the free market and, to be honest, I don’t really see why you’d want to. It presumes something morally reprehensible about producers working together whilst at the same time absolving consumers of any moral wrong doing for the very same thing - which sounds rather contradictory to me.
Heck, look how much trouble OPEC has cooperating on production quotas… and that would arguably be one of the most successful cartels around (with the exception of the banking industry, which is only more successful because it’s enforced at gunpoint). Does anyone really beleive OPEC controls gas prices though? Have they had any success keeping gas prices high recently, as they’ve so desparately been trying to do? Of course not. Mostly what drives gas prices is supply and demand - not OPEC.
PS: Armentano’s book is called “Antitrust, The Case for Repeal” and it’s part of the Mises home study course so is almost certainly available in the literature section of this website as a PDF somewhere.