Do We Need "Political Antitrust" Policy?

Antitrust (or competition) policy serves the purpose of protecting consumers against the economic power of individual or a few companies. At least in a narrow definition. But we have become so used to stable democracies that we have forgotten what those who fought monopolies a century ago thought about the connection between monopolies, antitrust policy, and democracy.

In the 1930s, University of Chicago economist Henry Simons discussed the anti-democratic nature of monopoly power. “Political liberty can survive only within an effectively competitive economic system,” he wrote. “Thus, the great enemy of democracy is monopoly, in all its forms.”

The issue is crucially important as we contemplate the power of de facto monopolies like Google, Facebook and Co., and the rise in inequality. This text is a conference report that starts with an interesting historical exposition around the political dimension of antitrust, before going through the pros and cons. It is a tad long, but worth reading, given the importance of the issue at stake.