Question

How does the U.S. economy compare with other market capitalist economies with respect to its degree of industrial concentration and the nature of its antitrust policies?

Answer 1

The U.S. government policy towards business was summarized by the French term laissez-faire-- "leave it alone." The idea came from the economic theories of Adam Smith, the 18th-century Scot whose works greatly affected the growth of American industrialism. Smith believed that private interests ought to have free rein. As long as markets were totally free and competitive, he stated, the actions of personal individuals, encouraged by self-interest, would interact for the greater good of society. Smith did favor some forms of government intervention, generally to develop the ground rules totally free business. It was his advocacy of laissez-faire practices that earned him prefer in America, a nation constructed on faith in the individual and mistrust of authority.
Laissez-faire practices have actually not prevented private interests from turning to the federal government for help on many events. Railroad companies accepted grants of land and public aids in the 19th century. Industries dealing with strong competitors from abroad have long appealed for defenses through trade policy. American farming, nearly completely in private hands, has taken advantage of government assistance. Many other markets also have actually looked for and gotten aid ranging from tax breaks to straight-out aids from the federal government.
Government guidelines of the personal market can be divided into 2 classifications-- economic policy and social policy. Financial regulation seeks, primarily, to control rates. Developed in theory to protect consumers and specific companies (typically small businesses) from more effective companies, it often is justified on the grounds that totally competitive market conditions do not exist and therefore can not supply such protections themselves. In a lot of cases, nevertheless, economic regulations were developed to safeguard the business from what they referred to as devastating competitors with each other. Social regulation, on the other hand, promotes objectives that are not financial-- such as more secure workplaces or a cleaner environment. Social policies look for to prevent or restrict hazardous business habits or to motivate behavior deemed socially desirable. The government manages smokestack emissions from factories, for example, and it offers tax breaks to the business that provide their employee's health and retirement benefits that satisfy specific requirements.
American history has actually seen the pendulum swing consistently between laissez-faire principles and demands for government regulation of both types. For the last 25 years, liberals and conservatives alike have sought to reduce or eliminate some classifications of the financial guidelines, concurring that the regulations incorrectly safeguarded business from competition at the cost of consumers. Political leaders have actually had much sharper differences over the social guidelines. Liberals have actually been much more most likely to favor federal government intervention that promotes a variety of non-economic goals, while conservatives have been most likely to see it as an invasion that makes services less competitive and less efficient.

the United States Steel Corporation, which managed the majority of all the steel production in the United States, was implicated in being a monopoly. Legal action against the corporation dragged on up until 1920 when, in a landmark choice, the Supreme Court ruled that U.S. Steel was not a monopoly since it did not engage in "unreasonable" restraint of trade. The court drew a careful distinction between bigness and monopoly and suggested that corporate bigness is not necessarily bad.
The federal government has continued to pursue antitrust prosecutions given that World War II. The Federal Trade Commission and the Antitrust Division of the Justice Department expect prospective monopolies or act to prevent mergers that threaten to decrease competition so badly that customers could suffer. Four cases show the scope of these efforts:

In 1945, in a case including the Aluminum Company of America, a federal appeals court thought about how big a market share a company could hold before it must be scrutinized for monopolistic practices. The court decided on 90 percent, keeping in mind "it is doubtful whether sixty or sixty-five percent would suffice, and definitely thirty-three percent is not."
In 1961, a variety of companies in the electrical devices market were condemned to fixing prices in restraint of competition. The companies accepted pay substantial damages to customers, and some business executives went to jail.
In 1963, the U.S. Supreme Court held that a mix of companies with large market shares could be presumed to be anti-competitive. The case included the Philadelphia National Bank. The court ruled that if a merger would cause a company to manage an undue share of the marketplace, and if there was no evidence the merger would not be hazardous, then the merger could not take place.
In 1997, a federal court concluded that despite the fact that selling is normally unconcentrated, certain retailers such as office supply "superstores" compete in unique financial markets. In those markets, the merger of 2 substantial firms would be anti-competitive, the court said. The case involved an office supply business, Staples, and a building supply company, Home Depot. The planned merger was dropped.
As these examples demonstrate, it is not constantly simple to define when a violation of antitrust laws occurs. Analyses of the laws have differed, and experts typically disagree in examining whether companies have actually gotten a lot of power that they can disrupt the functions of the market. What's more, conditions change, and business arrangements that appear to present antitrust threats in one era might appear less threatening in another