Antitrust "Reform" Isn't the Answer
The recent announcement by the Reagan administration that it will introduce legislation to "reform" our antitrust laws, particularly our anti-merger laws, to conform the antitrust laws to the executive-branch policy of non-enforcement requires a response. Its proposal raises fundamental issues concerning the relationship between industrial size and international competitiveness, the proper role of government in policing big business in a capitalist democracy, and the deference due legislative opinion by an allegedly conservative administration in determining that role.
The Reagan administration's argument -- that American business must become more competitive internationally and will do so by reducing competition domestically through integration -- has been proven incorrect. That argument has dominated the policy of non-enforcement or our anti-merger laws during the past five years, and our foreign-trade deficit has increased dramatically -- as have the number and size of corporate mergers.
The increase in foreign competition caused primarily by low foreign labor costs in labor-intensive industries means that American domestic markets must become more, not less competitive. That those markets become less competitive through integration has been demonstrated most recently by the comparatively slow and inefficient retail price response by our merger-marred domestic petroleum industry to dramatic reductions in the cost of crude oil.
Ponsoldt, James F., "Antitrust "Reform" Isn't the Answer" (1986). Popular Media. Paper 72.
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