> -----Original Message-----
> From: owner-lbo-talk at lists.panix.com
> [mailto:owner-lbo-talk at lists.panix.com]On Behalf Of Rakesh Bhandari
> One can't imagine a world in which the economist's idiosyncratic conception
> of (perfect) competition applies less and less.
I do have to say that the one thing law school has done for me is to help understand the ideology that promotes all this centralization in the name of free market competition and it does return us to our friend Richard Posner (and Coase). The argument is that perfect competition is only the ideal model that needs to include transaction costs. All the costs of negotiation and conflict lead to very different needs in the economy that the ideal of free competition. Once you assume transaction costs, you have to create all sorts of authoritarian top-down institutions to attain the same efficient results as perfect competition would accomplish with no transaction costs.
So magically, an ideology that bases itself on the ideal of competition promotes its exact opposite in order to create a simulacra of the results of competition. It's a lovely theoretical model -- much more attractive than neoclassical economics -- with some good analyis admist the rightwing ideological dross. But it is an ideology of true chutzpah and Orwellian labelling, where state repression of ideas becomes a promotion of "intellecual property" freedom and economic concentration and is the promotion of competition.
So Greenspan is arguing that the poor slobs in the boonies just don't understand the harsh needs of competition in this Posnerian world.
-- Nathan Newman