Lies the government told you by Andrew Napolitano (big screen ebook reader .TXT) 📕

that the standard of “innocent until proven guilty” has been categorically breached by the government time and time again, with no regard for due process and with continuing deception, then I can only imagine your outrage when you learn about a Federal law that in essence ensures you are guilty no matter what your intentions may be. This is the Sherman Antitrust Act of 1890. This one-hundred-twenty-year-old piece of legislation was the beginning of the ambiguous “Progressive” antitrust laws in the United States. It was hailed as ensuring that consumers would now be safe from the big, bad corporations who were going to get together and make everything unbelievably expensive.

After the Sherman Act became law, the business folks had a lot of trouble: If their prices were too high, that meant they were intending to monopolize; if they charged lower prices than the competitors, then they were charged with unfair competition; and if they charged prices similar to everyone else, then they could all be charged with conspiracy.21 Because the law is unclear, and its interpretation is constantly shifting and changing, a businessperson cannot know whether she or he is doing something legal or illegal. The president of United States Steel Corporation noted in a speech in 1950, which he entitled “Guilty Before Trial,” that if the antitrust laws persisted and were to be enforced “impartially against all offenders, virtually every business in America, big or small, is going to have to be run from Atlanta, Alcatraz, Sing Sing, Leavenworth or Attica.”22

Unlike the “supposed” presumption of innocence for individuals in the justice system, the business folks under attack from antitrust laws are in essence guilty until proven innocent, and there is no standard on how to prove their innocence. Supreme Court Justice Robert Jackson, when he was head of the Antitrust Division of the Department of Justice, noted that it “is impossible for a lawyer to determine [in advance] what business conduct will be pronounced lawful by the Courts,”23 and that this was an embarrassing situation for everyone involved. Basically, anytime anyone goes into business, he can be automatically guilty of one violation of the Sherman Act or another, solely through the setting of prices for his product.

The government always claims to have good reasons for antitrust laws. Its original reasoning was that “trusts [an ancient word for commercial agreements] tended to restrict output and drive prices up.” Of course, there was no evidence in support of this theory at the time that the Sherman Act was passed. Rather, there is actually evidence that the trusts reduced prices, and Congressman William E. Mason (R-IL) stated, on June 20th 1890, that “trusts have made products cheaper, have reduced prices” but then also claimed that this was irrelevant, because by making prices lower, the trusts had effectively “destroyed legitimate competition and driven honest men from legitimate business enterprise.”24

The basic rationale behind antitrust legislation is, as usual, the public safety; specifically economic safety. The feds claim they can prevent companies from restricting the market and therefore raising prices and preventing technological advancement. The government assumes that without its protection, the people will be gouged by corporations who would form monopolies or cartels, or “trusts,” and engage in “predatory practices.”

These are the government terms that strike fear into the average person. All of us, even those who have not studied economics in any way, have learned the dangers of these actions. We hear the word monopoly and think that it means the end of competition in the market, and the beginning of one giant corporation taking every little cent of our money. Yet, when one actually considers the monopoly in a free market, it should be simple to see that the only monopoly that could survive was one that offered the best products at the best prices.

Any corporation needs customers who are willing to buy from it. If it is monopolistic and does not offer the best products, other entrepreneurs will start their own business, and customers will leave the monopoly and move to the competition. And if it does offer the best product for the best price, then why is that movement a bad thing? Do we honestly mind paying less for a better product because it is produced by a company that sells more than 50 percent of those products in a given market? In reality, the only monopolies existing currently are those run by the government, like the post office and utility companies, which are immune from the antitrust laws. Sadly, as we know, the government does not practice what it preaches.

But if the whole purpose of the Sherman Act, as stated by the government, has been to ensure competition, was not part of competition the idea that some lose while others win? Even the government could not keep its sham reasoning straight. And the reason for this was explicitly stated by the New York Times, on September 29th 1890, which concluded “[t]hat so-called Anti-Trust law was passed to deceive the people and to clear the way for the enactment of this . . . law relating to the tariff.”25 Tariff laws were, of course, very beneficial to the government collecting the tariffs, so there is no question why it would want to ensure that the public was kept from those truths because the Sherman Act falsely proved to everybody that the government was protecting them.

What the government hid was that it was protecting the people not from rising prices, but from reduced prices. This can be seen from the cases of U.S. v. Standard Oil of New Jersey and U.S. v. American Can. These are the seminal antitrust cases that influenced all those that were to follow. In the 1911 case of U.S. v. Standard Oil of New Jersey, among the charges laid was raised prices to consumers. Yet petroleum prices had decreased during the alleged monopolization, declining from thirty cents per gallon in 1869 to six cents per gallon at the beginning of the antitrust trial.26 The company was