If prices rise after an NBC/Comcast merger, is that bad?
A member of congress was complaining before about a merger 鈥� the NBC-Comcast deal 鈥� and he said the government had to stop it, because if the merger goes through, consumer prices will increase. Let鈥檚 stipulate this congressman, by virtue of winning a local popularity contest (election), is imbued with superior economic foresight and knows what prices will be in a given market for the indeterminate future. Why are higher prices a bad thing?
This is a question nobody asks in Antitrust World. It鈥檚 an article of faith that higher prices are bad if they occur after a merger. It鈥檚 okay if prices rise otherwise, just not after a merger. Again, nobody ever bothers to question the logical foundation of this position.
Many consumers would like to have their cake and eat it too: They want prices to remain level, or fall, irrespective of overall demand and available supply. Some of us are mature enough to understand why that doesn鈥檛 happen. Antitrust World, however, is populated by intellectual children who treat the laws of economics like it was a bedtime that one can negotiate and whine about to get an extra hour of play.
Of course, the antitrust argument against higher prices is more ethical than economic: It鈥檚 wrong, and thus illegal, for prices to rise after a merger. But again I ask, 鈥淲hy?鈥�
There鈥檚 a natural resistance to change that permeates the political culture. For example, most local governments now have 鈥渉istoric preservation鈥� or 鈥渁rchitectural review鈥� boards that can veto even the smallest change to nominally private property. Just because something is old or preexisting, we鈥檙e told, the state must protect it from spontaneous change.
And that seems to be a core belief in Antitrust World. Whatever the prices are today are good because, well, they鈥檙e the prices today. Change is always suspect. Hence, the 鈥渄emocratic process鈥� must supervise change to ensure things don鈥檛 change too dramatically. Nevermind the fact that true democracy occurs in the free market, not the authoritarian state.
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