EVIDENCE ACCUMULATES that people's view of the antitrust laws is changing--not just the Reagan administration's view, but also that of people of all political stripes who keep track of these laws. These laws have the potential for great good and harm: they are government's main weapon against anticompetitive business practices, but they can also hamstring businesses to the point where they can't compete effectively. The latest evidence of change comes from the systematic review by the Antitrust Division of the Justice Department of consent decrees and other court orders restraining businesses indefinitely from certain practices.
Justice now wants to dissolve those restraints that it believes have no effect in promoting competition or actually restrain it. One case involves Safeway, the nation's No. 1 food retailer. A 25-year-old court decree bars Safeway from, among other things, selling items "at an unreasonably low price." The idea evidently was to protect smaller grocery chains from Safeway's supposed market power. But what price is unreasonably low? From a consumer's point of view, low prices are welcome. And in an industry like food chains, there is plenty of robust competition and no assurance that big firms will remain dominant in the market. Five of the top nine grocery chains when the Safeway decree was entered were not in the top nine at all in 1980; Safeway went from No. 2 to No. 1, but A&P dropped from the top position off the list altogether.
Why do these restrictions seem unwarranted today when they were accepted routinely 25 years ago? One reason is that today we understand that businesses are operating in an international market. American producers compete in world markets and face competition in this country from importers. In the late 1960s, Ralph Nader and many antitrust experts wanted to break up General Motors. Now we are trying to beef it up. A second, ultimately more important reason, is that people seem to have greater faith that competition can work. Many writers have described a nation in which giant corporations could impose their products on consumers. The auto industry again has proved the most vivid sort of demonstration that, if there is such a nation, it is not the United States. If a firm is making monopoly profits, capital will be available for competitors who want to split up the pie. Giant firms like A&P will make mistakes. New products will emerge to make old monopolies obsolete. All this doesn't mean we don't need an antitrust law. But it does suggest why people across a very broad spectrum of opinion no longer think we need antitrust laws that try to freeze in place a status quo, laws that try to prevent rational competitive responses like lowered prices and joint ventures in order to preserve competition itself. Competition turns out to be a hardier animal than most of us thought.