America's Antitrust Legislation and the New Global Economy
John Kenneth Galbraith in The New Industrial State argued that U.S. anti-
trust legislation is a result of outdated arguments about the need to preserve “free
enterprise” and the competitive market. Galbraith stated, that large corporations in
modern economies may need to limit competition in order to achieve efficiency and
compete with foreign imports in the new global economy.
I agree with this statement. When a corporation becomes big and starts
to grow and expand they will soon gain control of their market. Once a company has
gained control of their market, within their nation, they can focus their attention on
competing in the global market for their product. More effort can now be directed
towards, achieving efficiency, and the improvement of their particular product. And
since their only competition is foreign competition they can spend less money on
advertising and other cost consuming practices of competition.
A monopoly is a market situation in which there is only one seller of a
particular good or service. When companies exercise monopoly power they act as if they
were monopolies. Government regulation of big business/monopoly power arose because
of the following accusations: monopolies raise prices, monopolies reduce output and
living standards, monopolies are inefficient and wasteful, monopolies are intensive to
consumer demand, monopolies engage in unfair competition, monopolies help bring on
recessions and they threaten our political system.
The current antitrust laws were written without respect to the foreign
market. When these laws were created the foreign market was not as big as it is today,
nor was the US’s involvement in it. The US’s economy was just starting to develop
and to boom. The antitrust laws were needed to nurture and to boost the growing
economy. Now that our economy is flourishing, and no longer needs to be nurtured, these
laws are hindering further growth. They need to be reviewed, and revised in order to
better suit our current economy. The purposes of these laws are no longer true.
Monopolies can no longer raise prices with regards only to the ease with which buyers
can find substitutes products. They still have to worry about the foreign products being
sold for less. Therefore, prices will not be higher, output and living standards will
not be affected, they will not become inefficient and wasteful, they will not be