Sordid History
30 December 2007
The Editor, New York Times
229 West 43rd St.
New York, NY 10036
To the Editor:
Peter Goodman asserts that "The monopolistic excesses of the Robber Barons led to antitrust laws" ("The Free Market: A False Idol After All?" December 30). This notion is as mistaken as it is common.
Research conclusively shows that before the 1890 passage of the Sherman Antitrust Act the industries run by so-called "Robber Barons" behaved in ways emphatically opposite the ways of true monopolists. J.D. Rockefeller, Andrew Carnegie, Gustavus Swift, and other "Robber Barons" expanded their outputs more rapidly, and cut their prices more deeply and consistently, than did other business owners. Research also reveals that Sen. John Sherman sponsored his famous Act in order to get political cover for his pet cause: higher tariffs. Only three months after passage of the antitrust act, Sen. Sherman successfully pressed for the McKinley Tariff of 1890.*
The only "excess" at the time was Congress's duplicity as it posed as defender of consumers while saddling them with higher prices made possible by what was then the largest tariff hike in U.S. history.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
* Thomas J. DiLorenzo, “The Origins of the Sherman Act: An Interest Group Perspective,” International Review of Law and Economics, June 1985, pp. 73-90.
The Editor, New York Times
229 West 43rd St.
New York, NY 10036
To the Editor:
Peter Goodman asserts that "The monopolistic excesses of the Robber Barons led to antitrust laws" ("The Free Market: A False Idol After All?" December 30). This notion is as mistaken as it is common.
Research conclusively shows that before the 1890 passage of the Sherman Antitrust Act the industries run by so-called "Robber Barons" behaved in ways emphatically opposite the ways of true monopolists. J.D. Rockefeller, Andrew Carnegie, Gustavus Swift, and other "Robber Barons" expanded their outputs more rapidly, and cut their prices more deeply and consistently, than did other business owners. Research also reveals that Sen. John Sherman sponsored his famous Act in order to get political cover for his pet cause: higher tariffs. Only three months after passage of the antitrust act, Sen. Sherman successfully pressed for the McKinley Tariff of 1890.*
The only "excess" at the time was Congress's duplicity as it posed as defender of consumers while saddling them with higher prices made possible by what was then the largest tariff hike in U.S. history.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
* Thomas J. DiLorenzo, “The Origins of the Sherman Act: An Interest Group Perspective,” International Review of Law and Economics, June 1985, pp. 73-90.
Posted by Don Boudreaux on
Thursday May 29, 2008 at 5:42pm