Congrats on Dr. Zhaofeng Xue‘s new book: Commerce without Frontiers: The Economics Revolution in Antitrust (商业无边界——反垄断法的经济学革命).
Dr. Zhaofeng Xue has written a book of enormous value to the Chinese economy. It is, in a word, a guidebook to the many traps and fallacies of American-style (and, even more, European-style) antitrust law that is being adopted willy-nilly in many countries. One cannot read or peruse this monograph without becoming completely puzzled about how such a plethora of errors could exist in this era of scientific economics and startled by the attractiveness of this muddle for other countries.
Dr. Xue’s first task then is to demonstrate why such phenomena as large-scale firms, resale price maintenance, vertical integration, below-cost pricing, price discrimination and many kinds of mergers are pro-competitive, economically beneficial practices. The strong economic logic which now explains these benefits was not, however, always understood. American antitrust laws date from 1890, while many of the convincing explanations Dr. Xue offers were not developed in the economics literature until the second-half of the 20th Century. And while American courts have for some years now reshaped antitrust law to reflect this newer understanding, other nations’ courts and regulators seem to want to stop the intellectual clock at about 1950, the highpoint of fallacious antitrust reasoning.
Congrats Zhaofeng. I know who I can call next time if I have antitrust questions. (smile)