The Dark Magic of Promotio Competitio
Promotio Competitio is a magic spell, more potent than many others. Neither Harry Potter’s Expecto Patronum, which drives away horrifying Dementors, nor Hermione Granger’s Obliviate, which made her parents forget that they ever had a daughter, can compare to the power of Promotio Competitio.
Promotio Competitio gives the government the power to justify any intervention in our economic affairs by appealing to the positive sentiments most of us feel toward “competition.” Let’s prohibit mergers and acquisitions (that would make companies more valuable and efficient), the Federal Trade Commission says. Let’s expropriate Big Tech firms by breaking them up into a plethora of minions, with no regard for either property rights or impact on consumers, Elizabeth Warren says. Let’s aid the helpless, small European innovators to compete by regulating and fining the most innovative and successful American companies to death, the European Union says. Let’s slash credit card late fees, cutting the legs of creditors and reducing credit access for those who need it most, and target other “junk fees,” turning them into an invisible and more easily manipulable part of the total cost, Joe Biden says. Why the crusades, you ask? Promotio Competitio!
Why do we love competition so much that a simple two-word spell makes us swallow any government infringement into our economic affairs? And by “we,” I don’t mean just the lovers of free markets. Notice how every antitrust executioner swings his legislative axe at the neck of his target company, vowing to deliver the promised land of more competition. I argue it is because we conflate the process with the goal.
Consider why education, or learning in general, is a value. It’s a ubiquitous trope to say that you should be learning all your life and that there is no end to improvement. While it is fundamentally true, what are we after, learning or knowledge? Imagine somebody saying that you should take as many classes as you possibly can, forever, with no end in sight, because we need “more learning,” regardless of whether you learn something or not. It’s just learning and studying for the studying’s sake. That should strike you as bizarre. We value learning because we assume it will provide knowledge, leading to success in life. The end is knowledge; education is just the means. If, after years of excruciating studies, when you finally get to say, “aha! Now I can go and do this!” somebody responds with, “No no no, we need to promote learning, so get back in class,” you should be outraged.
Yet that is precisely how the antitrust paradigm conceives of competition. If, in the process of learning and discovery through competition, one producer concludes that the most valuable and efficient outcome is to buy his mismanaged competitors, unite their skills with his own, and produce the best imaginable final product, antitrust rises tall and says, “Not so fast. Our goal is more competition, not that you realize the best productive plan possible.”
If, at a particular point in time, a company like Standard Oil (which supplied 90 percent of kerosene in the world) or Google (85 percent of the internet search market) faced barely any competition, our 200 years of mainstream economics-fueled instincts scream “monopoly!” “lack of competition!” “Break them up!” Yet what if there were just no one else able to offer more value? While the future might hold a disruptor with a brilliant idea, the current state of affairs may be the best we can wish for at a particular moment in time. To “break” the winners up for the sake of “promoting competition” would mean destroying the second and disincentivizing the first.
There will always be room for improvement and progress, and we must protect the freedom of creative destructors to step in and challenge the status quo. But it is the liberty to compete and to reap the rewards for success in competition that we need to defend, not a perpetual struggle for the sake of struggle. Gigantic winners will arise without artificial barriers like government regulations, licenses, and mandates. But that is the feature of free competition, not a bug.
There is no point in struggling if there is no end to be achieved. Promotio Competitio should be relegated to the corner of forbidden, dark magic. Instead, I suggest we embrace Freedom Protecto and Celebratio Successio.