Since free-market firms tend toward an optimum size where the factors of economy of scale and information synergy are in balance, antitrust actions in effect seek to reduce the size of firms below this optimum point, by dissolving competitors who realize efficiencies resulting from economies of scale. If such actions are successful, then production is restricted to relatively inefficient and costly processes. As the quantities of goods produced is diminished, consumers must bear correspondingly higher prices.

Furthermore, the requirements of antitrust law are inherently vague and subjective, based on arbitrary and undefined differences of degree. What size of firm will be deemed "overly large" by antitrust prosecutors? Where is the dividing line between competitive success and "unfair" competition? Once the principles of the free-market have been rejected, such questions can no longer be answered objectively; consequently, the distinction between legal and illegal business conduct can be determined only ex post facto, by arbitrary judicial orders. In the climate created by antitrust legislation, business leaders cannot know in advance what decisions might later be construed as punishable offenses. They must factor into every decision the possibility that it might be subject to future prosecution, resulting in enormous legal costs even if that prosecution is unsuccessful. Both producers and consumers bear the adverse effects of this punitive environment.      Next page


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