Aaron Director in 1950 declared competition would destroy all monopoly absent government

Evidence

The neoliberal reorientation toward monopoly first made its debut in Director’s book review of Charles Lindblom’s Unions and Capitalism (Director 1950). Director maintained that because of competitive forces emanating from the supply side of the market, competitors would supplant any monopoly that attempted to permanently restrict its own supply. According to Director, the market system through the “corroding influence of competition” (p. 165), has the “effective tendency” to “destroy all types of monopoly” (p. 166; emphasis added). Thus, competition became Director’s philosopher’s stone, and the only way the stone would lose its prodigious powers was whenever government intervened. Director maintained that history had demonstrated that without the intervention of government, “competitive tendencies have triumphed over the exclusive or restrictive tendencies” (p. 166). Among most economists and jurists of the 1950s, however, it would have been an outrageous oxymoron to maintain that competition existed even in the face of monopoly. Therefore, by 1950, Director had become an acolyte of an unprecedented faith in the forces of competition. — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 1109

Categorization

• XREF: Director’s ‘corroding influence of competition’ thesis connects to Hayek’s ‘road to serfdom’ called up in the next paragraph and to the wider Mont Pèlerin anticollectivist project this book chronicles. — connects to: Friedman reversed the classical liberal claim that monopoly suppresses competition — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 1118
• DEFINE: This crystallizes the hallmark Chicago-school anti-monopoly-law stance: monopoly self-destructs, only government sustains it — the position that defined later antitrust thought.
• SEED: An essay angle: how a single 1950 book review by an obscure law professor seeded the entire Chicago antitrust revolution — the genealogy of ‘competition destroys monopoly.‘

Broader Connections

• Friedman reversed the classical liberal claim that monopoly suppresses competition #contradicts (0.85) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 1118