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Free markets versus perfect competition (Wall Street Journal letter to the editor)

Mark D. White

Today The Wall Street Journal printed my letter in response to a recent piece by Tim Wu (linked below), in which I reiterate an argument from my paper providing a Kantian critique of antitrust (from the Journal of Private Enterprise):

A Free Market Means That It's Free for All

 

Tim Wu, in his Nov. 13 Review commentary "In the Grip of the New Monopolists," expresses surprise that free markets would lead to monopolies rather than vigorous competition. But that would imply that the word "free" in free markets refers to a result (of textbook-style "perfect competition") rather than a process (of voluntary exchanges between buyers and sellers). Understood correctly, the free market may result in a dizzying array of outcomes, but all of them derive from an institution that respects the free choices of all participants in the market—even if those choices are in support of (transitory) monopolists such as Google or Facebook.

(For more on transitory monopolies, see Liebowitz and Margolis' excellent book, Winners, Losers & Microsoft.)

Comments

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Congrats! Excellent letter!

Thanks, Jonathan!

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