At least now, recognizing that I was debating someone who really has his own ideas, rather than regurgitating poorly understood philosophy digested from novels which are longer than necessary, we could get down to business.

Mr Peters,
Ah, the Austrian School. Of course. Now I've never really studied any of their serious works, though I am a little bit familiar with some of the ones you mention. I basically understand their philosophy to be pretty much Libertarianism, set to economics. There's nothing wrong with that, of course, and as a fiscal conservative, I have a great deal in common with an economic Libertarian: we both despise Keynes, we both claim that free trade benefits even its unilateral practitioners, etc.

But I have some problems with strict Libertarianism, and I have some problems with the Austrian School of economists by extension. Libertarianism has as its one great asset its total absence of self-contradiction, achieved mainly by taking an extreme but narrow position (just say "no" to government) and then insisting on its universal applicability. I find that position to be (forgive me) too simplistic to be satisfying, and as a consequence do not adhere to it.

I really don't mean to impugn the whole Austrian School of economics, which has contributed significantly to modern economic theory, especially in its innovative explanation of the business cycle. Though even there, their assertion that using fiscal and monetary policy to moderate a recession is a bad thing seems a bit extreme, and dictated by the absolute need to remain consistently on topic ("government BAD"). But I think that many other schools of post-classical economists have made contributions as well, and I can't say I wholly agree with any of them either. It seems to me that a choice of favorite modern economic system has become almost a political preference: liberals automatically love Keynes, and Libertarians automatically love the Austrians, because it results in one adhering to an economic system which won't produce predictions or solutions at odds with one's own political beliefs. Maybe that's the only reason I like Adam Smith.

Now as far as your last post is concerned, I must say that your provocative thesis has captured my attention. I want to ask a few follow-up questions to make sure I understand you correctly.

1. MP: "The main reason it is a fallacy is that when a company, dominant or not, begins displeasing its customers, it has no power to stop competitors who come on the scene in response."

Is this universally true? What about in an industry with high barriers to entry? What about a corporation which is willing to engage in a predatory price war if a new entrant comes along? If the incumbent has a sufficient cash hoard available, he could certainly outlast a new entrant; or is there something there I'm overlooking?. Or does your assertion of this powerlessness hinge on the presence of anti-trust regulators to stop such a thing?

2. MP: "There isn't even _one_ example in history of a dominant company harming its customers in the way you suggest is possible"

This claim certainly gets one's attention. It is so bold, so brash, that certainly somewhere you must have a study you can point to which backs this up. If so I would genuinely like to read it and would be grateful if you would point it out to me.
Further, are you arguing that it is impossible for a monopoly to hurt consumers the way I suggest, or merely that it's never been done?

And the last point about this claim is that this suggests that every anti-trust suit ever brought by our government must have been frivolous, even the successful ones. Microsoft lost its anti-trust case, though its penalties seem pretty minor; AT&T settled its anti-trust case and agreed to break itself up; Standard Oil was broken up into 34 companies, to name just a few obvious examples. Were all these decisions, proved in open court, wrong? I assume your answer is yes, but why? Were consumers hurt by these verdicts or was it simply an "unjust" or "unfair" result to penalize these successful companies?

3. MP: "- unless the company gained its dominance via the government."

At least we agree that state-granted, legally-enforced monopolies are bad things.

4. MP: "The only thing anti-trust activity has accomplished is the destruction of mass quantities of wealth and of the lives and careers of our best businessmen."

>> American courts do not much like breaking up successful companies. But when they do, the results are not always dire. Think of Exxon, Mobil, Amoco, Chevron: those companies, with a long and valuable history, are among the fragments of Standard Oil, broken up in 1911. In the subsequent decade, the value of Standard Oil's divided assets rose fivefold. John D. Rockefeller, lucky man, thus made more money in retirement than during his working life. << (The Economist, "Bill Rockefeller?," 4/27/2000)

>> The [1982 AT&T] breakup created an array of choices that consumers still find confusing. But it's widely agreed that it lowered long-distance prices and stimulated innovation. The companies created out of the Bell System, including those since swallowed up, are worth about $810 billion today, vs. $59 billion before the breakup. That 1,300% gain compares to a market-cap rise of just 140% for IBM over the same period. << (Business Week, "Commentary: The Lessons of the AT&T Breakup," 11/22/1999)

Please substantiate your previous comment in light of the above excerpts. And do you agree that post-breakup long distance prices are generally cheaper? If so, isn't that an instance of antitrust enforcement providing a benefit to consumers?

5. MP: "If you look at who complains about alleged abuses, you will see that it is not the customers of the accused company, but its _competitors_."

True enough, if all you're basing that on is reading the news. But I (as a consumer) bitch about my buggy, time-to-upgrade-again-where's-my-checkbook Microsoft software daily. I just don't do it in the news. I am going to assume that judges in antitrust proceedings discount competitors' claims somewhat to account for this effect.

I appreciate your willingness to participate in such a spirited debate, and I hope to learn something from your reply.

JKS.

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