Predatory Complaints
16 August 2008
Editor, Baltimore Sun
Dear Editor:
It's no surprise that an Intel Corp. attorney defends his company's pricing practices (Letters, August 16). But before dismissing this defense because it is self-interested, understand that the loudest complaints against Intel's practices are equally self-interested. They come from Intel's competitor, Advanced Micro Devices - which complains mostly about Intel's price CUTS.
Given our unavoidably imperfect knowledge, often in law the best we can do is to rely upon rules of thumb. And surely in antitrust law a worthwhile rule of thumb is to reject out of hand the complaints of any firm that cries that its competitors' prices are too low. History knows not a single example of consumers being harmed by firms lowering prices to capture larger market shares.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
Enterprise Hall
George Mason University
Byrd Brain
15 August 2008
Editor, The Wall Street Journal
200 Liberty Street
New York, NY 10281
To the Editor:
Senators Sherrod Brown and Robert Bryd support the "Continued Dumping and Subsidy Offset Act," which would entitle American producers to collect big bucks by identifying foreign competitors who offer American consumers prices that Uncle Sam agrees to be "unfair" - that is, too low (Letters, August 15). Overlook the medieval superstition of a "just price" that contaminates this proposal and focus on the perverse incentives it creates for producers.
Rather than earn profits fairly by pleasing consumers with innovation and improved efficiencies, U.S. firms will steal profits unfairly by harming consumers with lawyers hired to win bounties for their masters by seeking out and destroying prices that consumers find especially attractive.
Far from attacking unfair commerce, Messrs. Brown and Byrd are its great champions.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Fly Lufthansa to Laredo!
14 August 2008
Editor, USA Today
Dear Editor:
Re: "Nickeled-and-dimed" (August 14):
What would you predict about the quality and price of cars if Uncle Sam allowed NO foreign auto producers to compete domestically against GM, Ford, and Chrysler? The answer is obvious: Americans would pay exorbitant prices for shoddy cars.
So it's unsurprising that Americans pay exorbitant prices for shoddy air travel: Uncle Sam allows NO foreign airlines to compete on domestic routes against American-owned carriers.
The quality of air travel would rise and its price fall if Uncle Sam were to allow Americans to choose from among domestic AND foreign carriers for that flight to Grandma's for Thanksgiving and to the business meeting in Waukesha or Wilmington.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Nudge Not
13 August 2008
Editor, Financial Times
Dear Editor:
Cass Sunstein and Richard Thaler seek to replace most government force with government "nudges" ("The dramatic effect of a firm nudge," August 13). They say that such nudging preserves "freedom of choice [as] an important safeguard against the bias, confusion and self-interest of government." While I agree that nudges are preferable to force, better still would be to stop government, as much as possible, from having ANY influence on persons' choices. Neither force nor nudging.
Profs. Sunstein and Thaler inadvertently offer a reason why government nudging is dangerous, namely, that government decision-making is biased, confused, and self-interested. Surely such an institution is not to be trusted to act wisely when it nudges us - especially if the authors are correct that we respond to nudges so dramatically.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
Enterprise Hall
George Mason University
Intervention Breeds Demand for More Intervention
13 August 2008
Editor, The New York Times
229 West 43rd St.
New York, NY 10036
To the Editor:
Central to David Zinczenko's "case for governmental intervention" into the eating habits of poor Americans is the fact that, as he says, "a single grapefruit from a corner fruit stand costs two or more times as much as a few Chicken McNuggets" ("Los Angeles Stages a Fast Food Intervention," August 13).
Memo to Mr. Zinczenko: a major reason grapefruit costs so much is unwise intervention by the very institution - government - that he looks to for relief. Tariffs on imported grapefruit raise the price of this nutritious food. This anti-consumer effect is intensified by U.S.D.A. "marketing orders" requiring producers to withhold supplies that threaten to "destabilize" - that is, reduce - grapefruit prices.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Wisdom of Gordon Tullock
12 August 2008
Editor, Washington Post Book World
1150 15th St., NW
Washington, DC 20071
Dear Editor:
In his fine review of "Traffic," Jonathan Yardley expresses admiration for Tom Vanderbilt's explanation that there's no simple relationship between making roads "safer" - for example, keeping roads straight and well-marked - and actually achieving greater safety (August 10). As Vanderbilt notes, drivers on straight, well-marked roads often drive more carelessly than do drivers on obviously treacherous roads. Economists call this phenomenon "compensating adjustment."
Government officials should remember compensating adjustment when mandating safety. As my legendary colleague Gordon Tullock observed years ago in response to government prohibitions on sharp, pointy automobile dashboards and controls: "They've got it backwards. If they really want to reduce traffic fatalities, they should mandate that each steering wheel be fitted with a dagger pointed at the driver's heart."
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
