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Monday, March 13, 2006

Monopolies Have Been Very, Very Good to Me

This is all you need to know about the analytical abilities of the financial writers (as opposed to economists) at the NRO Online:

The Fatal Conceit of Anti-Trust Laws, by John Tamny, NRO Online: ...If anything, consumers should hope that companies succeed in achieving monopoly profits. ... It can even be argued that if companies do not achieve monopoly gains, they’re engaging in activity that is not important to consumers and that will not attract competition.

Yeah, wheat farming is pretty unimportant. I'll be so much better off if someone can monopolize that industry and raise the price of bread. Tamny confuses prices as a short-run signal to direct resource flows and equilibrium prices at inefficient levels due to market power. Yes, profits and losses are necessary in the short-run to encourage entry and exit. But monopoly profits that persist through time in the long-run equilibrium are not in the economy's best interest.

    Posted by on Monday, March 13, 2006 at 12:34 PM in Economics, Press | Permalink  TrackBack (0)  Comments (6)

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