This set of review questions is part of the Liberty In the Books program, a monthly discussion group. These questions cover Dominick T. Armentano’sAntitrust: The Case for Repeal (Revised Second Edition).
Reading I: Through Page 50
1. What have been the basic results of antitrust enforcement, in Armentano’s view? (Page xi)
2. What does “rent-seeking” mean, and how does it apply to antitrust? (Page xi)
3. What is the correct understanding of “competition,” what is “pure competition,” and how does this apply to antirust? (Page xii)
4. What is the meaning of “economies of scale,” and what is the relevance to antitrust? (Page xiii)
5. What are the basic aims of antitrust? (Page xiii)
6. What were the general trends in antitrust enforcement in the 1950s and ’60s, the 1970s and ’80s, and the 1990s? (Pages xiii-xvi)
7. What were the antitrust-related complaints against Microsoft? (Pages 1-2)
8. What does the term “creative destruction” mean? (Page 4)
9. What are “network effects,” and do they justify antitrust action? (Pages 4-5)
10. What is “path dependence,” does it “lock in… inferior technology,” and does it justify antitrust action? (Pages 5-6)
11. Did Microsoft unfairly bundle its web browser with its operating system? How does this complaint look in 2010? (Pages 6-8)
12. What role do exclusive contracts play on an open market, and do they ever justify antitrust action? (Pages 8-9)
13. What was the Lorain Journal case, did it justify antitrust action, and was the Microsoft case comparable to it? (Pages 9-10)
14. What does the Microsoft case illustrate about the nature of antitrust enforcement? (Pages 10-12)
15. What is the “barriers-to-entry doctrine,” and what has been the actual behavior of firms punished under antitrust? (Pages 13-14)
16. What antitrust enforcement actions did IBM face? (Pages 14-15)
17. What was the trend of the data-processing industry in the mid-20th Century? (Page 15)
18. Are profits higher in concentrated industries in the short and long term? Why? (Page 16)
19. What is the actual cause of “monopoly power?” (Page 18)
20. What has antitrust done to business consolidations, and what has been the economic effect? (Page 18)
21. What is the problem with regulators and courts attempting to discover social benefits? (Page 19)
22. Are antitrust laws consistent with rights of property, association, and due process? (Page 19)
23. What lesson does Armentano find in the case of airline deregulation? (Pages 20-21)
24. Contrast the “public interest” with the “special-interest” theories of antitrust policy. (Pages 21-25)
25. What is the theory of “concentrated benefits, dispersed costs,” and how does this apply to antitrust? (Page 24)
26. How does antitrust constitute an attempt to centrally plan the economy? (Pages 25-26)
27. What does the AT&T case reveal about antitrust policy? (Pages 26-29)
28. What is “allocative inefficiency” and “technical inefficiency” in standard antitrust doctrine? (Pages 31-33)
29. What real-world economic activity does the theory of “pure and perfect competition” exclude? (Pages 33-35)
30. Are “free-market monopolies” able to restrict production and raise prices? (Pages 35-39)
31. Contrast the popular account of Standard Oil with the factual history of the company’s performance. (Pages 40-43)
32. Can studies of profitability justify antitrust enforcement? (Pages 43-44)
33. In Armentano’s view, should antitrust be used even against legally enforced monopolies? (Pages 45-46)
34. Why does Armentano push for the complete repeal of antitrust, rather than only administrative reforms?
35. What is Murray Rothbard’s critique of standard monopoly theory? (Pages 47-50)
Reading II: Page 51 to 106
1. What is the meaning of a “non-legal barrier to entry?” (Page 51)
2. What is “product differentiation,” and what are some examples of it? (Page 51-52)
3. What are the “revealed preferences of consumers,” and what do they have to do with antitrust? (Page 52, 54)
4. What is the difference between “pure competition” and the “actual competitive process,” according to Armentano? (Page 53)
5. What is wrong with the assumption of “perfect information?” (Page 55)
6. Was there a monopoly in ready-to-eat cereals in the 1970s? (Page 55, 57)
7. Does risk of failure by potential new competitors, economies of scale for existing competitors, or efficiency of existing competitors justify antitrust action? (Page 56)
8. Can advertising constitute an unfair barrier to entry? (Pages 57-60)
9. Is it true that “more competitors are always better than less?” (Page 60)
10. Did the Aluminum Company of America constitute an unfair or inefficient monopoly? (Pages 60-63)
11. Is the ability of an established, successful firm to raise capital, offer innovative products, or lower prices unfair or harmful to consumers? (Pages 63-67)
12. What is “price discrimination,” what are some examples from every-day life, and does it justify antitrust action? (Pages 69-73)
13. What are “tying agreements,” and do they justify antitrust action? (Pages 73-76)
14. What are “resale price-maintenance agreements,” are they fair, and do they justify antitrust action? How did the U.S. government once forcibly limit price competition? (Pages 76-77) (Note: The Supreme Court seems to have subsequently limited restrictions on pricing agreements; see http://en.wikipedia.org/wiki/ Leegin_Creative_Leather_Products,_Inc._v._PSKS,_Inc.)
15. What are “vertical mergers,” and should they ever be legally restricted? What the government justified in intervening in Brown Shoe’s acquisition of Kinney retailers? (Pages 77-79)
16. What are the different sorts of “horizontal agreements,” and how are they treated under antitrust? (Page 81)
17. Is the “rule of reason” approach in antitrust in fact reasonable? (Page 82)
18. Are government regulators able to accurately define the “relevant market” for alleged monopolistic practices? (Pages 83-85)
19. Is there any clear relationship between market concentration and “economic power to reduce market output and raise market prices?” (Pages 85-86)
20. What is the problem with attempting to tie alleged monopolistic practices to output restriction? (Pages 86-87)
21. Can government regulators accurately determine “social benefits” of mergers? How does the Staples case illustrate the problems with intervention? (Pages 87-90)
22. Can “horizontal price coordination” create market efficiencies? Should it be outlawed? (Pages 90-94)
23. How did the federal government forcibly restrict competition in the trucking industry through the Interstate Commerce Commission? (Page 93)
24. Are attempts by firms to reduce output and raise prices generally effective? What is the appropriate remedy for such attempts, according to Armentano? (Pages 94-95)
25. Did the Addyston Pipe Case of the 1890s demonstrate the need for antitrust laws? (Pages 95-97)
26. How do “antitrust laws stand in direct violation of civil liberties, individual rights, and due process of law?” (Pages 99-106)