With the baseball playoffs upon us, now would be a good time to talk about how economic regulation suppresses free speech. Major league baseball — and, specifically, its exemption from federal antitrust laws — provides a good example of this phenomenon.
First, though, let’s do a short history of antitrust laws.
Reflecting the beginning of the turn toward socialism and economic interventionism in late 19th-century America, Congress enacted the Sherman Antitrust Act of 1890. It empowered the federal government to bust up private companies that had grown large by successfully satisfying consumers in the marketplace.
The rationale for the law was that it would help preserve a competitive economic system. The idea was that large companies became “monopolies,” which supposedly enabled them to keep other companies from entering the market to compete against them, thereby supposedly keeping prices artificially high.
The reasoning was specious. The only real monopoly is one where the government enacts a law that protects a certain company or its own governmental enterprise from competition. When such a law is enacted, if a company tries to compete against the government-protected monopolist, the government shuts it down immediately.
A good example of a monopoly is the Postal Service, at least with respect to its delivery of first-class mail. If anyone opens a business to compete in the delivery of first-class mail, the Justice Department will immediate seek and secure an injunction from a federal judge that orders the shut-down of the competing firm.
A firm that gets large simply by satisfying consumers is not a monopolist. At any time, new firms are free to enter the market and compete. The successful firm will continue doing everything it can to satisfy consumers. If it fails to do so, it loses market share and maybe even goes out of business.
That’s why the Sherman Antitrust Act was never necessary. It constituted a grave infringement on principles of the free market, private property, economic liberty, liberty of contact, and freedom of association. In a genuinely free society, any business is free to get as large as it is able, including through mergers and acquisitions, by providing goods and services that satisfy consumers.
In a 1922 case, the U.S. Supreme Court carved out an exception to the Sherman Antitrust Act for Major League Baseball. It was an unusual decision, given that ordinarily that sort of thing comes through duly enacted legislation rather than by a judicial ruling.
Now, to the main point of this article — how economic regulation suppresses free speech.
Last summer, to protest an election law enacted by the state of Georgia, Major League Baseball announced its decision to move its All-Star Game from Atlanta to Denver.
In a retaliatory move, three Republican U.S. Senators — Ted Cruz, Mike Lee, and Josh Hawley — proposed legislation to end MLB’s antitrust exemption.
While the proposal did not cause MLB to change its mind about its All-Star Game, it does show how a government privilege can operate to keep an entity from criticizing government at a fundamental level.
Consider, for example, if MLB executives began taking public stands against the Pentagon’s and CIA’s torture and prison camp at Guantanamo Bay, Cuba. Or against the Pentagon’s current attempt to ratchet up hostilities against China. Or against the U.S. government’s decades-old embargo against Cuba. Or against the entire “war on terrorism.” Or against U.S. state-sponsored assassinations.
What would happen? There is no question about it. The Pentagon and the CIA would immediately order their many assets in Congress to retaliate by threatening to end MLB’s antitrust exemption.
MLB is fully aware that this would happen, which might explain why no baseball official ever takes public stands against the U.S. national-security state’s evil and malevolent actions. Better to remain silent. Discretion is the better part of valor.
The same holds true, of course, for executives at other major U.S. companies. There, the implicit threat is not to end an exemption from antitrust laws but rather implicit threats like IRS audits or crackdowns by regulatory agencies.
A good example is the banking industry. Whenever federal bank regulators enter a bank to conduct an inspection, the bank president quivers and quakes. That’s because they all know that the banking inspectors have the power to shut them down with regulatory write-ups.
How many bank presidents in the United States have taken any major public stand against what the Pentagon, the CIA, or the NSA have been doing for the past, say, 30 years. Not very many, if any. They are too fearful of the potential for regulatory retaliation.
The solution? No, the solution is not to “level the playing field” by ending MLB’s antitrust exemption. The solution is to repeal the Sherman Antitrust Act of 1890, along with all other antitrust laws. In a larger sense, the solution is to separate economy and the state, which would necessarily entail the end of all economic regulation and the restoration of a genuine free-market, private-property system. In the process, genuine freedom of speech would be restored as well.
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