Thursday, July 19, 2012

Remarks by the President on Entrepreneurialism

Sen. Charles Schumer (D-NY) has appealed to the U.S. Justice Department to drop its antitrust lawsuit against Apple and certain book publishers through an op-ed in the Wall Street Journal, insisting that it will result in restoring Amazon to the “dominant position atop the e-books market”. The Justice Department filed the suit earlier this year against the iPad maker and five publishers for allegedly colluding to fix e-book prices. While Hachette, HarperCollins, and Simon & Schuster settled, Macmillan and Penguin Group are still part of the case. According to Schumer, Apple’s method actually helped increase competition and drive prices lower, and that the suit could “wipe out the publishing industry as we know it,” making it harder for young authors to get published.

Senator Tells DOJ: Drop Apple’s E-book Lawsuit! 

The Obama regime has recently made clear it's contempt for entrepreneurialism, and the Department of (in)Justice continues to attack everything but the cause of any problem on which it focuses. How do these efforts promote any sort of economic health? 

If you were successful, somebody along the line gave you some help.  There was a great teacher somewhere in your life.  Somebody helped to create this unbelievable American system that we have that allowed you to thrive.  Somebody invested in roads and bridges.  If you’ve got a business -- you didn’t build that.  Somebody else made that happen.  The Internet didn’t get invented on its own.  Government research created the Internet so that all the companies could make money off the Internet.
While everyone has different driving forces and motivations, only those who actually take action have the rights to the results of those actions. The state believes itself to be responsible for every positive action and result in markets, though the opposite is actually true. When the state intervenes, markets become inefficient and costs to consumers rise. But why should statists like Obama believe any different when we have idiots like Paul Krugman telling them that they are correct.

Remarks by the President at a Campaign Event in Roanoke, Virginia | The White House

Schumer is correct in defending free market principles, and Apple's efforts have definitely worked toward driving down costs to consumers. Even in a true monopoly situation, the market for eBooks would not be as efficient as some fear, but the healthy competition in this market will keep costs down over the long run, as innovation is thriving in this industry and coming from small and large businesses alike. This sort of collusion is more likely to keep competitors in the market, rather than driving out the ones that can not compete.
More than two centuries ago, in "The Wealth of Nations," Adam Smith observed that "people of the same trade seldom meet together . . . but the conversation ends in a conspiracy against the public or in some contrivance to raise prices." Coming from the father of laissez faire, that warning has been cited ad nauseam by antitrust proponents to justify all manner of interventionist mischief. Those same proponents, whether carelessly or deviously, rarely mention Smith's next sentence: "It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice."
The Case Against Antitrust

Government intervention into markets which are operating competitively is politically-driven (or revenue-seeking), and not in the interest of consumers or producers. Price-fixing is rarely an issue outside of a pure monopolistic situation, and this is far from one. If anything, this false flag interventionism into the market will drive up costs to consumers due to litigation and lobbying, and stifle innovation.
Make no mistake: A growing drumbeat of questions from Washington puts a damper on innovation. Reflecting on Microsoft’s decline after its decade-long antitrust case, tech expert Adam Thierer wrote in Forbes, “When antitrust hangs like the Sword of Damocles, every decision about how to evolve and innovate becomes a calculated gamble.”
D.C. Wants a Bite at the Apple

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