May 26, 2010

Government welcomes Apple to big boys club with kick in the balls

Now that Steve Jobs' company is worth more than Bill Gates', the antitrust army has grown bored of lobbing bricks through Microsoft's windows and decided to poison Apple instead. (Here and here.)

Modern antitrust suits as a general rule are bogus; the companies under attack are typically responsible for falling prices and improving quality, all the way back to the first railroads and Standard Oil. They serve instead as a ritual to show whoever the fittest companies are that they'd better watch their behavior or else. In a market economy, this is unnecessary because firms that harm consumers will be driven out of business by competitors, and to the extent that these lawsuits tie up the companies' time, money, and manpower, they parasitize economic health.

But in a society ruled by competitive politics, government agents can only get away with what the public will allow, and will pursue what the median voter desires. If they don't, they'll get thrown out of office, or the elected official who appointed them or their party will be punished. The average person has so little faith in the ability of market competition to discipline how companies behave that they're willing to tolerate -- and often cheer on -- the antitrust "watchdogs" who only screw up the products that consumers love.

The price of going to the movies didn't get any cheaper when the government banned Hollywood studios from owning theaters in which to show their movies, and this is the source of the high price of popcorn and other concessions at the movies that consumers always complain about. Pretty soon it'll be harder or more expensive to get mp3s from iTunes, but people have such a deeply rooted fear of any big organization that they're willing to pay that higher price if it means someone gets to knock Apple around so that they don't get too big for their breeches.

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