'The Myths of Anti-trust' 40th Anniversary

0:00Well, I'm pleased to be up here and I'm not last because I'm the most prestigious, actually I'm the only one on this panel I've never heard of. But I do want to give a little background of my own situation and how I happen to be involved in this. because in 1970, I was working for Stauffer Publications at the peak of Kansas doing ag policy. I was not a PhD economist, I was a dilettante, I was a conservative, I'd read a little Ayn Rand, but I really didn't know much about where I was going or what I was doing and I was limited in my ability.

0:46Yeah, let's go back to that first page, will you? Okay, okay. But anyway, so, I, someone asked me to go to a fee weekend seminar. I didn't know what fee was, but I went there and I had an epiphany. And it really opened my eyes unbelievably about free market economics and this whole worldview that they sort of introduced me to. And I said, yeah, I want to learn more, I want to learn more, what shall I do? And to Randy's point, they said, here, read Human Action. Well, Human Action for a guy at my stage of knowledge and learning was a little bit daunting. And I could not make a connection between any of this free market stuff and the agriculture policy that I was working on.

1:38I actually went to the Kansas State University Library in the early 70s in the early 70s and went through almost every book that I could find on ag policy to try to get some connection to what I'd learned at Fee and what I'd been exposed to. Actually, I wasn't at the Thursday meeting in which they honored Bill Peterson, but I finally found Bill Peterson's little book, The Great Farm Problem, in the Topeka Public Library, which wasn't much of a library, really. But I found that, and that gave me hope, that maybe there was a link, maybe I could put these two things together. In 1973, early 1973, I went to a second fee seminar, which was also in Kansas, but another town, and everything that I had learned in 70 was reinforced, and I got this, I was energized, I got this commitment, I got this obsession for doing the proselytization of the world and bringing free markets to the ag community.

2:46I was very conscious of Leonard Reed's libertarian leadership steps. The first one is you do no ideological wrong, which ain't so easy as he would say. Secondly is that you become knowledgeable enough that you can talk to people in your orbit about these ideas. And third is that you become so skilled as an expositor of these things that people will actually seek your tutorship. And as Leonard used to say, there's no end to the tutin that you can do. But anyway, at the same time, I was looking for ways to combat what I was hearing in agricultural economics which was the biggest problem is market power.

3:31That's the biggest problem, that farmers are unable to compete with these huge corporations who have so much power over them, monopoly is a big problem, and it was just something was beyond my understanding, and I was getting national review at the time, and there was an advertisement for the myths of antitrust, and so I sent it off and I got a copy, here Here it is, I think it's number seven off the press. But anyway, it was another epiphany for me. It not only changed my thinking, but it gave me tremendous encouragement to move my life in the direction that I wanted to go, which was somehow link these two things together.

4:25So what I had up there was, I spent the next five years putting together something called the Institute for the Study of Market Agriculture and I put it up there just because I wanted to show you the quality of the advisory board that I put together. These are not Austrians, for the most part Zeke Pesauer over here on the right is probably the only one who would be Austrian, but Peter Bauer obviously one of the great names in and Development Economics, Bruce Gardner, who went on to Chicagoite, who went on and became Undersecretary of Agriculture, Del Gardner, P.J. Hill, Gail Johnson was the Provost, Cliff Glutrell was at the Federal Reserve Bank of St. Louis, Don Parleberg, again, who was Undersecretary of Agriculture under Nixon, Leonard Truman at Kansas State, and then Ted Schultz, who became a Nobel Prize winner.

5:17So I had really worked, I mean I really worked hard at putting this together and developing this organization. And I'm telling you this because I want to explain why Dom's book was so important to me. I got to the point where I was so obsessed with this idea that I sold my house and took the little savings I had and all the equity that we had in our house in spite of the fact that I had three young children and tried to start this organization. And in about 1978, actually I came out here and Roger Garrison and I were talking about this. I came to Auburn in 1978 to try to connect this institute to Auburn University.

6:05And we had a big meeting with all of the big shots in the university and the board members and the chief council and all that. And we got, Roger was really no help at all, we got shot down, we got shot down pretty bad and they said this is too radical an organization. With all these Chicagoites, I mean I couldn't believe it, but they said it was too radical organization. And I think, Lew told me one time that several years later, when they brought the Mises Institute to Auburn, he originally was able to affiliate in some modest way with Auburn and that was That's my contribution, the old saying that your life can always serve as a bad example to someone else or something.

6:55That was my contribution to the Mises Institute. But anyway, Charles Koch called me in the spring of 1979 and said, I want you to come out here and talk to me about your institute. I was so excited because I thought, here's the breakthrough when I'm looking for, he'll give me enough money to make the leap from a fledgling thing I do in my kitchen to a real institute. When I got there, he said, tell me about your institute. So I did, and he said, well, I'm not really interested in agriculture. I'm interested in starting a new organization that will be in Washington D.C. and it will be an association of business executives and business entrepreneurs who will commit to a free competitive economy.

7:52It was originally called BLAST, Business Leaders Against Subsidies and Tariffs, but they had changed the name just then to the Council for a Competitive Economy. And so in 1979, well just back up a little, Charles said I'll tell you what you do, put your organization in the drawer for a few years, get this thing going for us really well, get a nice long list of major corporations that all are anarcho-capitalist, run by anarcho-capitalist executives, And then when you get that, then if you want to go on with your Ag Institute, maybe I'll help you do that then.

8:38So, I did that. And I went to Washington, and this is an example. And I just, I put, this is a quote from an article I wrote for the Independent Review some years ago about that. And you don't need to read the whole thing. But the second point was that here was our message. and basically Charles allowed me to sort of set the stage for this thing and run it as I proposed and so we said for a corporation or other business entity committed itself to compete solely or primarily through a free and open market relying thereby for its success on the voluntary choice of consumers is an ethical high road. That's what we wanted to instill in the business community that there is a high road by taking the market approach. I added that it's virtually It was very impossible to overstate the degree to which this point is lost on, if not all together to boo, for those who sit in corporate boardrooms.

9:37It was a very difficult, almost an impossible task to try to criticize business, try to make them understand what we were trying to do and raise money from them. But in the second paragraph here, I said our classic attack on free markets was to raise the specter of monopoly and market power. Our position was not poor, it's supposed to be clear, I don't know where poor came in. Our position was clear. We advocated an economy both operated and structured by the forces of the free market, is one responsive to customers rather than to politicians. And we stuck to that. And we had people come to our organization, and they would say, you're for competition, right?

10:32Yes, well, then we would like your support in this area. And it was always an antitrust issue. And they said, you don't really understand competition if you don't buy this. Well, we had a library, but I also had an office, and I didn't keep very many books in my office, but I did keep Dom's book. And when I was a kid, about six or seven years old, one time my father, who was big in the Lutheran Church, had some big shot from the Lutheran Church there visiting him. And I can remember, excuse me, I was six or seven, I was following him along listening and, you know, trying to hear what the men were talking about. And the man said, you have really nice children. They're very well behaved and personable. He said, what's your secret?

11:22My father said, this book right here. And he took a book out of his library and it said, children are people. And the bishop or whatever he was looked at and he said, Huh, children are people. Is it a good book? My father said, I've never read it. He said, it's just the title sort of tells the story. So, when I would get, when these people would come into me and say, I don't understand competition, I would say, let me just show you where we stand. And I would take Dom's book out and they would say the myths of antitrust, what is this about? I said, well, speak to the book because we're not involved in your antitrust case or whatever it is.

12:14We went on to be as radical as we could be. Just to give you one example, we put in 1981, we did a national conference on economic freedom, this is my last slide, and the whole idea was to have some academic or expert of another kind to make a case for total absolute freedom in some sector of the economy. Zeke Pacehauer made the case for getting government completely out of agriculture and food policy, George Benson getting the government out of banking and finance, Sheldon made a case for adding out of communications, on down the line, we had a young kid from Rutgers, Joseph Salerno, gave a talk about international trade, I think they hung you up on labor, didn't they, that wasn't it, free labor, or international labor.

13:16But anyway, we really tried to do this. Well, here's the point. This was my Bible, and I don't want to read too much of this, but I just want to read you a little bit of the last chapter of this book. And what Dom said was capitalism is a viable economic system or it is not. An active policy of government intervention in a free market business system is a contradiction in terms. Trades of private property are either voluntary or they are not. One cannot legislate the free market or create competition.

14:04To have a free market, the government must leave the markets alone. To have the state make markets free is again a contradiction in terms. Critics of antitrust policy who pretend to be concerned with free enterprise system have either not realized or have refused to realize this fundamental issue. Is there business monopoly in the present economic system? Of course there is. Certain favors, privileges, patents, subsidies, tariffs and franchises can and do allow certain corporations to hold and to employ monopoly power, i.e. governmental power for economic advantages. Such plutocratic devices, as William Graham Sumner termed them, are the essence of monopoly and they are absolutely improper in a free market system and should be ended.

14:57The monopolies that the FCC, the CAB and the ICC maintained could not last a day without government support. But this kind of monopoly has nothing directly to do with the mission of antitrust. Antitrust supposedly was aimed at free market monopoly problems and the marginal competitive problems that would arise when business was left to pursue its own self-interest. Yet ironically, the essence of the monopoly in the marketplace is governmental. Certain elements of the business community have never desired free competition and the uncertainties and irrationalities often associated with it. They have sought and gained economic subsidy and protection through the political system. They have been anxious to use the government to regulate competition because it was supposedly tending toward monopoly.

15:47Anti-trust, therefore, may be an even bigger hoax than anyone has imagined. Well, it's not just antitrust. It was the whole cross-the-board issue of government involvement in the economy. I am proud to say that while that organization was defunct within about six months after I left in the summer of 1984, and for some of those who read the blogs over the last couple of years with the Cato Institute will understand how it ended, Charles Koch decided that we wanted to change the direction change the board of directors and I said well we are bored we have 18 members and they voted 17 to one against you he said you didn't realize when you took this job that the board of directors doesn't control the council for a competitive economy it is There's a shareholder corporation and four or five of us own the shares in the corporation and we have the right to eliminate your board of directors and start over.

17:00So I left and that was the end of that, but it was a great, I still look at it as one of the great achievements and one of the great efforts that I made in my life to be able to be just as radical as I could be, as Leonard Reed said, to commit no ideologically wrong steps. We were as leak-free as Leonard Reed would say as it's possible to be. And I think that I would be remiss if I didn't tell Dom that this book gave me the strength and the length of character and the arguments that I was incapable of getting from Human Action but which was right down my alley during all those years so tip of the hat to you Don, thank you.