Monday, March 18, 2013

RN: The Memoirs of Richard Nixon, Volume 2: 2

For my write-up today on volume 2 of Richard Nixon's memoirs, I'll highlight something that Nixon says on page 53:

"As I saw it, the Justice Department suits [against the International Telephone and Telegraph Corporation] were a clear violation of my anti-trust policy.  I was convinced that American companies would be able to compete in the international market only if they were as big and strong as the government-sheltered monopolies in so many foreign countries, and therefore I had instructed that big businesses were to be broken up only when they violated the laws of fair competition and not simply because they were big."

The context of this quotation is Nixon's discussion of the charge that President Nixon pressured the Justice Department to settle with the ITT in exchange for the ITT contributing to the 1972 Republican National Convention.  Nixon responds to this charge in a variety of ways, such as by noting that the settlement was more favorable to the government than it was to the ITT.  Nixon also lambastes Democratic hypocrisy.  For example, while Senator Ted Kennedy grandstanded during the ITT hearings, Kennedy pressured William Casey of the Securities and Exchange Commission not to name as a defendant in a civil suit an investment banking firm that one of Kennedy's friends headed.  (So testified Casey, Nixon narrates.)

But what interested me was Nixon's articulation of his stance on anti-trust policy.  Nixon thought that a number of companies in the U.S. needed to be big in order to compete with companies overseas, some of which were themselves big and were sheltered by their governments.  I can somewhat see Nixon's point, for, when a company is big and consolidated, it can arguably produce more.  But do not monopolies result in higher prices, and perhaps even less efficiency, due to the absence of competition?  Perhaps, but it's not as if the big companies in the U.S. were not competing; according to Nixon, they were competing with overseas companies.  I wonder to what extent that is true today, when there are multinational corporations (not that I know what the extent of their existence was during Nixon's Presidency).

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