Antitrust Regulation

Monopoly Is Constitutive of the Division of Labor

We say that direct democracy is not practicable because we don’t all have time to vote on every matter of government. Therefore, we delegate to elected representatives. That delegation concentrates power in the hands of the representatives. But we don’t worry too much about that because we regulate our representatives’ behavior. If they do wrong, we throw the bums out of office. It follows that as between individuals we do not condemn all concentrations of power as a general matter, but instead permit those concentrations that we believe will be good for the community, and regulate them to make sure that they are in fact good for the community.

Antitrust does the same thing with respect to business firms.

Antitrust permits concentrations of economic power when their owners wield it for the benefit of society. Antitrust condemns concentrations of economic power otherwise. Antitrust lets the phone monopoly persist for so long as it provides cutting edge service.

The view that all monopoly is non licet is tantamount to the view that no one should ever have more power in any domain than any other person. That, of course, is incompatible with the administration of anything so large as a society, in which the division of labor, and hence the concentration of power in the hands of particular people or organizations in particular domains, is essential. What prevents such concentrations from leading to abuse is oversight and regulation—not deconcentration.

The concept of the virtuous monopoly is inherent in the concept of the division of labor. To oppose monopoly per se is to oppose the division of labor.