One of the hazards [writes Mr. Fleming] that sales managers must now take into account is that some policy followed today in the light of the best legal opinion may next year be reinterpreted as illegal. In
‘Ibid., p. 13.
• Ten Thousand Commandments: A Story of the Antitrust Laws, New York: Prentice-Hall, 1951.
such case the crime and the penalty may be retroactive. … Another kind of hazard consists in the possibility of treble damage suits, also possibly retroactive. Firms which, with the best of intentions, run afoul of the law on one of the above counts, are open to treble damage suits under the antitrust laws, even though their offense was a course of conduct that everyone considered, at the time, quite legal as well as ethical, but that a subsequent reinterpretation of the law found to be illegal.4
What do businessmen say about it? In a speech entitled “Guilty Before Trial” (May 18, 1950), Benjamin F. Fairless, then President of United States Steel Corporation, said:
Gentlemen, I don’t have to tell you that if we persist in that kind of a system of law—and if we enforce it impartially against all offenders—virtually every business in America, big and small, is going to have to be run from Atlanta, Sing Sing, Leavenworth, or Alcatraz.
The legal treatment accorded to actual criminals is much superior to that accorded to businessmen. The criminal’s rights are protected by objective laws, objective procedures, objective rules of evidence. A criminal is presumed to be innocent until he is proved guilty. Only businessmen—the producers, the providers, the supporters, the Atlases who carry our whole economy on their shoulders—are regarded as guilty by nature and are required to prove their innocence, without any definable criteria of innocence or proof, and are left at the mercy of the whim, the favor, or the malice of any publicity-seeking politician, any scheming statist, any envious mediocrity who might chance to work his way into a bureaucratic job and who feels a yen to do some trust-busting.
The better or more honorable kind of government officials have repeatedly protested against the non-objective nature of the antitrust laws. In the same speech, Mr. Fairless quotes a statement made by Lowell Mason, who was then a member of the Federal Trade Commission:
American business is being harrassed, bled, and even blackjacked under a preposterous crazyquilt system of laws, many of which are unintelligible, unenforceable
‘Ibid., pp. 16-17.
and unfair. There is such a welter of laws governing interstate commerce that the Government literally can find some charge to bring against any concern it chooses to prosecute. I say that this system is an outrage.
Further, Mr, Fairless quotes a comment written by Supreme Court Justice Jackson when he was the head of the Antitrust Division of the Department of Justice:
It is impossible for a lawyer to determine what business conduct will be pronounced lawful by the Courts. This situation is embarrassing to businessmen wishing to obey the law and to Government officials attempting to enforce it.
That embarrassment, however, is not shared by all members of the government. Mr. Fleming’s book quotes the following statement made by Emanuel Celler, Chairman of the House Judiciary Committee, at a symposium of the New York State Bar Association, in January 1950:
I want to make it clear that I would vigorously oppose any antitrust laws that attempted to particularize violations, giving bills of particulars to replace general principles. The law must remain fluid, allowing for a dynamic society.8
/ want to make it clear that “fluid law” is a euphemism for “arbitrary power”—that “fluidity” is the chief characteristic of the law under any dictatorship—and that the sort of “dynamic society” whose laws are so fluid that they flood and drown the country may be seen in Nazi Germany or Soviet Russia.
The tragic irony of that whole issue is the fact that the antitrust laws were created and, to this day, are supported by the so-called “conservatives,” by the alleged defenders of free enterprise. This is a grim proof of the fact that capitalism has never had any proper, philosophical defenders—and a measure of the extent to which its alleged champions lacked any political principles, any knowledge of economics, and any understanding of the nature of political power. The concept of free competition enforced by law is a grotesque contradiction in terms. It means: forcing people to be free at the point
• Ibid., p. 22.
of a gun. It means: protecting people’s freedom by the arbitrary rule of unanswerable bureaucratic edicts.
What were the historical causes that led to the passage of the Sherman Act? I quote from the book by Mr. Neale:
The impetus behind the movement for the earliest legislation gathered strength during the 1870’s and the 1880’s. • . . After the Civil War the railways with their privileges, charters, and subsidies became the main objects of suspicion and hostility. Many bodies with re- ‘ vealing names like “The National Anti-Monopoly Cheap Freight Railway League” sprang up.6
This is an eloquent example of the businessmen serving as scapegoat, taking the blame for the sins of the politicians. It was the politically granted privileges—the charters and subsidies of the railroads—that people rebelled against; it was these privileges that had placed the railroads of the West outside the reach of competition and had given them a monopolistic power, with all its consequent abuses. But the remedy, written into law by a Republican Congress, consisted of destroying the businessmen’s freedom and of extending the power of political controls over the economy.
If you wish to observe the real American tragedy, compare the ideological motivation of the antitrust laws to their actual results. I quote from Mr. Neale’s book:
It seems likely that American distrust of all sources of unchecked power is a more deep-rooted and persistent motive behind the antitrust policy than any economic belief or any radical political trend. This distrust may be seen in many spheres of American life … It is expressed in the theories of “checks and balances” and of “separation of powers.” In the United States the fact that some men possess power over the activities and fortunes of others is sometimes recognized as inevitable but never accepted as satisfactory. It is always hoped that any particular holder of power, whether political or economic, will be subject to the threat of encroachment by other authorities…. [Italics mine.]
At one with this basic motivation of antitrust is its reliance on legal process and judicial remedy rather than on administrative regulation. The famous prescription of the Massachusetts Bill of Rights—”to the end it may be a government of laws and not of men”—is a favourite American quotation and an essential one for understanding antitrust. Without this factor it would be
•Neale, p. 23.
impossible to explain the degree of acceptance—so astonishing to those outside the United States—that is accorded to the antitrust policy by those interests, especially “big business” interests, which are frequently and expensively subject to its discipline.7
Here is the tragedy of what happens to human intentions without a clearly defined philosophical theory to guide their practical implementation. The first free society in history destroyed its freedom—in the name of protecting freedom. The failure to differentiate between political and economic power allowed men to suppose that coercion could be a proper “balance” to production, that both were activities of the same order which could serve as a “check” on each other, that the “authority” of a businessman and the “authority” of a bureaucrat were interchangeable rivals for the same social function. Seeking “a government of laws and not of men,” the advocates of antitrust delivered the entire American economy into the power of as arbitrary a government of men as any dictatorship could hope to establish.
In the absence of any rational criteria of judgment, people attempted to judge the immensely complex issues of a free market by so superficial a standard as bigness.” You hear it to this day: “big business,” “big government,” or “big labor” are denounced as threats to society, with no concern for the nature, source, or function of the “bigness,” as if size as such were evil. This type of reasoning would mean that a “big” genius, like Edison, and a “big” gangster, like Stalin, were equal malefactors: one flooded the world with immeasurable values and the other with incalculable slaughter, but both did it on a very big scale. I doubt whether anyone would care to equate these two—yet this is the precise difference between big business and big government. The sole means by which a government can grow big is physical force; the sole means by which a business can grow big, in a free economy, is productive achievement.
The only actual factor required for the existence of free competition is: the unhampered, unobstructed operation of the mechanism of a free market. The only action which a government can take to protect free competition is: Laissez-faire!—which, in free translation, means: Hands off I But the antitrust laws established exactly opposite conditions—and achieved the exact opposite of the results they had been intended to achieve.