Brandeis on Monopolies

I've been reading Mel Urofsky's biography of Louis Brandeis. I'd been aware of Brandeis and his article The Right to Privacy, and enjoyed touching a bit on privacy-related claims in my Torts class. I also appreciated his dissent in Penn. Coal Co. v. Mahon, where he argued that to analyze a "taking" by the government, the courts should determine the value of what remains to the owner, not a narrow diminution of the part that was taken. This approach was incorporated into the majority opinion in Penn Central Trans. Co. v. New York City, a landmark case about, well, a landmark.

Brandeis was a firm believer that large aggregations of economic power, including monopoly, were dangerous to the economy and to democracy. He argued that economies of scale and of monopoly are an illusion, and that competition is healthier:

This argument is essentially unsound. The wastes of competition are negligible. The economies of monopoly are superficial and delusive. The efficiency of monopoly is at best temporary. Undoubtably competition involves waste. What human activity does not?

This reminded me of an article in the Houston Chronicle by Lisa Gray, An economics lesson on the beer aisle, in which Ms. Gray points out modern examples of how prices at the supermarket are affected by a lack of competition in production and distribution. We see the same attempts at market control by participants in the software industry: Microsoft attempts to use its monopoly to maintain high prices for its operating systems and office software; Apple tries to lock users into its proprietary iTunes and iGadget ecosystems; and Oracle is trying to dominate the market for database systems and middle-ware. Louis Brandeis would feel right at home in our economy, almost 100 years after beginning his "reformist period" at the turn of the 20th century.