America's Antitrust Legislation And The New Global Economy

909 words - 4 pages

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trust legislation is a result of outdated arguments about the need to preserve “free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

intensive to...

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