The other day I was with a friend at McDonald’s, and as soon as we entered we saw a big queue of people (not the one in the picture). We both immediately sighed knowing we had to wait before we could spend our precious money in the famous junk food. The irritating fact was that McDonald’s had only employed two workers behind the 4-slot counter. Another one was dearly needed. Seeing this, probably out of bad hunger, my friend took a swipe at me challenging my free market views. He said, “If the government had managed McDonald’s, it wouldn’t be the profit motive that would motivate the firm’s actions [assuming McDonald’s weren’t employing another worker due to higher costs] but rather the needs of the consumers, which in our case, costly to McDonald’s or not, would be fulfilled by the introduction of another employer behind the counter.”
My aim in this paper is to investigate whether anti-trust legislation is necessary and whether abolishing it would be better for both consumers and producers. The backbone of anti-trust legislation lies in the fallacy of “market failure.” Proponents of anti-trust claim the free market isn’t capable of punishing firms that collude for their interests at the expense of the consumer. Such thinking is based on a flawed definition of monopoly. Without the understanding of the correct theory of monopoly as well as the relevant economic knowledge, anti-trust proponents are lost in the cause of promoting fairness but always fail to achieve it.
Banking regulations intended to avoid bank risks and other economic activities that “caused” the current financial crisis completely miss the point, but they are also wrong and naïve in themselves too.
Germany and France, the two big countries expected to shoulder the overwhelming Greek debt problems, have told Greece that it needs to undertake austerity measures before they can lend their controversial financial support (read bail out). In this Wall Street Journal article, it’s stated that while Germany and France have spoken of the possibility of future help, this pledge has come in a very vague tone. “No rescue is imminent, the document said, and the intervention would only be a last resort,” is written.