Speak Your Piece: Antitrust Law Perverted
[imgbelt img=Party94.jpeg]The worries about the power of Wall Street have their roots in rural America. More than 120 years ago, rural Grangers and Populists were warning about concentrations of business power. Maybe it’s time we listened to our rural forebears.
For several decades now, the efficiency argument has been used to allow mergers and acquisitions, resulting in “too big to fail.” Many of these mergers would not have been allowed under the original intent of antitrust.
But the situation is worse.
While antitrust law applies to collusion in the marketplace, the Supreme Court has opined that it does not generally apply to efforts to influence legislation and courts’ interpretation of law. Under Supreme Court opinions collectively known as the Noerr-Pennington doctrine, private entities are immune from liability under the antitrust laws for attempts to influence the passage or enforcement of laws, even if the laws they advocate would have anticompetitive effects.
Furthermore, private entities are immune from antitrust even when they employ deceptive and unethical tactics to influence legislation. Corporations and individuals are treated equally under Noerr-Pennington. Corporations, individuals and their trade associations have essentially no limits on trying to influence legislation or the courts. Deception and lies are just fine, thank you!
But the situation is worse than worse.
Powerful special interests not only try to influence legislation in their favor, they seek appointment of judges who are politically and ideologically aligned, particularly to appellate courts. A 2004 Business Week magazine cover story titled “The Battle Over the Courts: How politics, ideology, and special interests are compromising the U.S. justice system” described the situation perfectly:
“When you get right down to it, all of the (judicial) trappings are designed to build faith in the core ideals of the American judiciary: that judges are fair, objective, principled, and nonpartisan. That’s the theory. … So here’s where things stand: Conservatives blame liberals for the current debauched state of judicial politics, and liberals fault conservatives.
“The truth is that both sides are culpable – and seem to be racing to see who can capture lower ground. So long as the two sides remain locked in partisan warfare and the country’s overall civic culture continues to degenerate into ever more antagonism, there seems little reason to hope that politics will soon loosen its tightening grip on the judiciary.”
Has the dream of an independent judiciary envisioned by our Founding Fathers been hijacked? To paraphrase the Grange, has the tyranny of monopoly touched the ermine of the Bench? Sure seems that way to me.
We have recently witnessed the courts departing from the plain language of the PSA, followed by defeat of the proposed GIPSA Rules that were intended to better define “fair” markets. The Rules were defeated in part by intentional lies and political power, in my opinion.
French economist Frederic Bastiat observed in 1850 that the “law” might be diverted from its true purpose,
“The law perverted! The law, I say, not only turned from its proper purpose but made to follow an entirely contrary purpose! The law becomes the weapon of every kind of greed! Instead of checking crime, the law itself is guilty of the evils it is supposed to punish!”
In the words of Bastiat, our antitrust law and PSA have been perverted and made to follow an entirely contrary purpose.
In America we have the confluence of compelling political and economic forces as manifested in:
(1) The U.S. Supreme Court in Citizens United recently allowed unlimited political contributions by corporations;
(2) The Noerr-Pennington Doctrine that makes private entities legally immune for attempts to influence passage or enforcement of laws, even to the point of permitting outright lies and deception of legislators by corporations and trade associations, and;
(3) Re-interpretation of antitrust laws from broad social objectives to narrow economic efficiency objectives that do not necessarily nurture democratic values.
These forces threaten the very soul of American democracy and the American Dream.
Without corrective legislation refereed by a truly independent judiciary, these legal interpretations will continue to shape the economy, allowing it to become more integrated and concentrated, not just in the United States, but on planet Earth.
C. Robert Taylor is the Alfa Eminent Scholar and professor of agricultural economics at Auburn University. This is adapted from an essay in a book forthcoming from Springer, The Ethics and Economics of Agrifood Competition.