Damned Either Way

Here’s something you see every day: An idiot, anti-freedom lawsuit. But here’s something you don’t see every day: A newspaper with a clue about economics.

The theory behind predatory pricing laws is that a large company will sell certain products below cost in order to drive out competitors. Once the competitors are gone, goes the hypothesis, the big company will jack up prices to a monopoly level.

The only problem is, this never happens. New competitors always move fast into markets where prices are unjustifiably high. Predatory-pricing suits are generally filed by existing companies unable or unwilling to meet competition provided by more efficient firms. Legal restrictions on cutting prices invariably work against the consumer.

Cui Bono?

Jonah Goldberg posts an email with yet another good reason to be skeptical.

It’s just that I’m instinctively suspicious of people who put forth arguments based ostensibly on rational and humanitarian grounds, when those arguments would, if accepted by all relevant parties, result in greater power being granted those making the argument. In other words, I don’t believe people who say the earth is getting hotter because, if we all decided that the earth really was getting hotter, that would just happen to imply that we should all show more willingness to grant greater power and influence to the people telling us the earth is getting hotter.

Indeed it’s an appropriate red flag.