[Congressional Record (Bound Edition), Volume 145 (1999), Part 7]
[Extensions of Remarks]
[Page 10011]
[From the U.S. Government Publishing Office, www.gpo.gov]



                       INTRODUCTION OF H.R. 1789

                                 ______
                                 

                             HON. RON PAUL

                                of texas

                    in the house of representatives

                         Tuesday, May 18, 1999

  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.
  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.
  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.
  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.
  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.''
  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.
  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.''
  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.
  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.''
  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.




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