Perfect Competition, Imperfect Theory

Those one track minds
They took you for a working boy
Kiss them goodbye
You shouldn't have to jump for joy
--Tears for Fears

Tom DiLorenzo reviews economist attitude toward antitrust action. It hasn't always been positive. He notes that nineteenth century economists were generally chilly to the idea of regulating business to 'prevent monopoly.' In fact there is little evidence that late 1800s 'robber barons' were actually robbing anyone at all, as quantities were generally increasing while prices were decreasing in nearly all sectors.

He quotes Hayek, who believed that the idea of 'perfect competition' as conceived by the economic profession in the early 20th century, where price equals marginal cost, strips away competitive behavior from industrial activity. Instead, the perfect competition model assumes that government oversight must be present to squash such behavior.

Perfect competition and its regulatory facilitator comprise bad theory that has been a drag on productivity and competitive position of US industry for more than a century.