Here’s a letter to Barron’s:
Editor:
In your report on the D.O.J.’s antitrust suit against Apple, you note that “Attorney General Merrick Garland said Apple controls more than 70% of the premium U.S. smartphone market” (“Apple’s DOJ Lawsuit Is a Blow, But It Has This Silver Lining,” March 22). Such is the language commonly used to create the impression that today’s most successful companies possess monopoly power that can be wrested from them only by government. Yet this impression is mistaken. As Thomas Sowell wrote in 2011:
If, at a given time, three-quarters of the consumers prefer to buy the Acme brand of widget to any other brand, then Acme Inc. will be said to “control” three-quarters of the market, even though consumers control 100 percent of the market, since they can switch to another brand of widgets tomorrow if someone else comes up with a better widget, or stop buying widgets altogether if a new product come along that makes widgets obsolete.*
The creative destruction described by Sowell is inherent in the modern market economy. As long as government erects no barriers blocking entry into an industry, consumers are better protected, not by headline-hungry bureaucrats, but by competition from creative entrepreneurs risking their own money on efforts to show that the existing industry structure or practices can be improved. Merrick Garland, keep in mind, is risking none of his own money on the proposition that consumer welfare will be enhanced by forcibly rearranging the market served by Apple.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center George Mason University
Fairfax, VA 22030* Thomas Sowell, Intellectuals and Society (New York: Basic Books, 2011), p. 65.
