A new bipartisan bill in the Senate aims to rein in supposedly monopolistic and unfair business practices. But it will only petition in the long run and hurt the very consumers it’s intended to help.
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The popular view of the recent NBA Finals is that the Boston Celtics and Golden State peted for the title of best team. The nation’s best basketball players traded points, victories, and fouls on the way to the Warriors pulling off the final victory.
The truth is more cynical: The NBA has unethically created a vertically integrated league that puts everything from popcorn and chairs to players and stadiums under the control of a single entity. This has prevented any petition to the NBA for a half-century and has resulted in players and owners making billions of dollars off consumers.
Of course, consumers could buy elsewhere—other sports or nonsport activities, high school or college games, or pickup basketball. That’s what I believe as a free-market economist and former college basketball player.
But a bipartisan group of U.S. senators disagree. Ranging from conservative populist Josh Hawley to liberal DemocratAmy Klobuchar, they don’t think consumers are smart enough to make their own choices. And so they’ve introduced theAmerican Innovation and Choice Online Act, which is intended to panies’ ability to create efficiencies through bringing disparate parts of their supply chain under pany umbrella—known in corporate circles as “vertical integration.”
Ironically, Klobuchar and Hawley are pretending to bravely stand up for consumers who buy panies like Amazon, one of the world’s most panies. But if that was their real goal, they’d target the NBA and other panies that have just as much control over their supply chain … but don’t draw as much controversy among the political class.
As Senator Rand Paul (R-KY) noted earlier this month, this misguided bill will actually petition. Hundreds of millions of consumers prefer Amazon and Google over petitors because they’re better at offering the same or improved services. And while I share Paul’s distaste for panies’ one-sided political biases and censorship, I fear the empowering of the government’s biases and censorship even more. In fact, The Hill reported on June 15 that liberal senators have pressured Klobuchar into saying she’s open to the bill allowing censorship of conservative speech online.
Over and over, government regulations have been found to decrease, not petition. A 2015 Harvard study found that “an plex and uncoordinated regulatory system has created an uneven regulatory playing field” that played a key role in shrinking the role munity banks and increased the power of big banks.
As Washington Examiner columnist and American Enterprise Institute senior fellow Tim Carney said in an email, heavier regulations benefit established market players. “The big guys can afford the added overhead, hire the best lobbyists, and hire the regulators to be their lawyers,” wrote Carney. “Big government is a home game for Big Banks. Dodd-Frank crimped the Big Banks’ style a bit, but more importantly, it served to widen the moat between the Big Banks and their petitors. In that regard, it harmed consumers petitors to the benefit of the giants.”
Likewise, minimum wage laws give retail powerhouses like Walmart more market control, not less, because their petitors can’t keep up with rising costs. And it was the taxi industry that benefited for decades from regulations that Uber has fought to circumvent.
Unfortunately, evidence and rationality don’t seem to have much sway in Washington, D.C.’s view petition and consumer choice. Baron Public Affairsreportsthat antitrust momentum is with the left—members of Congress, top government officials, and others are most influenced by liberal academics and intellectuals whose point of view is that government should be more active in “protecting” consumers from making free economic choices.
All of which brings us back to the NBA. I’m a short guy whose basketball skills peaked as a guard at a small Catholic college. I never made it to the pros because the NBA has made it impossible for people like me pete against taller, more skilled players who were trained in top college programs. That may actually be the NBA’s biggest advantage over petition—a taxpayer-funded feeder network called the U.S. college system.
And therein lies the Klobuchar-Hawley solution: Politicians should prevent top college prospects from merging their talent with the NBA, which only increases the league’s market dominance.
Isn’t that absurd? Of course, it is. I can spend my whole plaining and stomping my feet, ranting on Twitter about NBA fans making free choices to spend billions on the league and asking politicians to interfere.
Or I can be rational and recognize that basketball fans receive more value by watching higher-skilled players.