In the past several decades, critics of U.S. antitrust policy have coalesced behind the libertarian banner of free market. Perhaps the most vocal and strident of these was Ayn Rand, an unapologetic paladin of unbridled laissez-faire capitalism. Ms. Rand’s most prominent disciple, Alan Greenspan, the head of the Federal Reserve from 1987-2006, denounced in 1961 that
The entire structure of antitrust statues in this country is a jumble of economic irrationality and ignorance. It is the product: (a) of a gross misinterpretation of history, and (b) of rather naïve, and certainly unrealistic, economic theories.
A central theme that runs through a lot of these criticisms is that antitrust laws must necessarily restrict freedom, and therefore they are anathema to the bedrock principles of a free society.
However, such view is misguided. These critics are conflating and confounding economic freedom with political freedom. These two freedoms, important though they are, are in fact opposed to each other in very fundamental way.
In Capitalism: The Unknown Ideal, Ms. Rand attacked antitrust laws for “persecuting” the businessman for his success. Hounded like a criminal, he is reduced to “[t]he position of a scapegoat for the evils of the bureaucrats.” Ms. Rand believed that antitrust laws were taking the United States—“the freest country on earth”— down the road to serfdom. Or as she put it,
A pure, unregulated laissez-faire capitalism has never yet existed anywhere. What did exist were only so-called mixed economies, which means: a mixture, in varying degrees, of freedom and controls, of voluntary choice and government coercion, of capitalism and statism.
While it is true that the kind of capitalism Ms. Rand was championing has never existed, it is also true that such idealized capitalism can only exist in a dictatorship, not in a liberal democracy.
James Madison made it very clear in Federalist 10 and 51 that organized interests, or “factions” as he called them, were necessary in a free republic. “Liberty,” Madison analogized, “is to faction what air is to fire, an aliment without which it instantly expires.” Where there are organized interests, there are organized efforts to influence the political process with money. When money infiltrates politics, collusion between big business and government is unavoidable. Hence, antitrust laws are there to protect the vested interests of those who are willing to buy access to government power.
But capitalism, in its purest, most pristine form, demands the kind of freedom that antitrust laws want to restrict – the freedom of firms to seek and maintain a monopoly in their respective industry. Because antitrust laws logically flow from a political system that encourages competing organized interests to vie for influence in government, restricting the role of money in politics would render quid pro quos between big business and government more unlikely, and thereby unchain capitalism from the regulatory shackles that are hobbling it.
It appears, therefore, that economic freedom demands a restriction on, if not an abolishment of, political freedom. Only a dictator can guarantee, by fiat, the economic freedom that undiluted capitalism promises – by outlawing money and lobbying in politics. As Madison observed, one of the “methods of curing the mischiefs of faction…[is] by destroying the liberty which is essential to its existence.”
Where there is more political freedom, there must necessarily be less economic freedom. In defending the rights of business, Ms. Rand and her ilk are, indirectly, attacking the rights of citizens in a democratic society to organize and to lobby for government protection of their interests. But so long as the U.S. Supreme Court continues to insist that corporations are people, as the Court did in Citizens United v. Federal Election Commission in 2010, and that campaign finance regulation is a violation of free speech, as the Court so held in McCutcheon v. Federal Election Commission in 2014, antitrust laws in the United States are unavoidable.