In his “first big public appearance” since being named Barack Obama’s chief antitrust enforcer, Assistant Attorney General William Baer addressed a gathering of antitrust lawyers at the American Bar Association. Baer stated that during the last five years, U.S. antitrust prosecutors collected 10 times as much money in criminal fines as they spent on criminal prosecutions.
“That’s a return on investment a lot of people in the private sector would envy,” he said.
There is so much wrong here that it’s hard to know where to start. First of all, was he joking? Perhaps—actually, I’d say he was half-joking. So let’s take the serious half seriously and ask what his little quip accomplishes.
In my mind, what stands out is how he blurs the line between economic power and political power. Economic power is productive ability—essentially, it’s Apple’s ability to offer an iPhone that millions of people want to buy. Political power is coercion—essentially, it’s the government’s ability to separate citizens from their property by threatening punishment, or by direct seizure.
The term “return on investment” offers a measure by which one can compare the profitability of placing money in various productive enterprises. If ROI is 2% in grocery retailing but 5% in petroleum refining, then that’s one factor in making an investment decision. But the government does not produce economic goods, nor does it generate profits. All it can do is seize the profits of productive enterprises.
Government officials who want to augment their power have every incentive to blur this distinction. Baer would like some of the aura of profitability to rub off on him. We shouldn’t let him get away with it.
If a common criminal “invests” $250 in a pistol and makes off with $10,000 in cash from a bank, has he achieved a 4,000% “return on investment”? Of course not. Clearly the robber produces nothing, he only takes. It would be a corruption to apply the term “return on investment” to his activities.
Taking money at the point of a gun—whether the gun belongs to a robber or a federal prosecutor—is not and can never be productive, and it’s a moral offense to equate the two. I’ve written elsewhere about why I question the propriety of the antitrust regime, as well as the penchant of federal antitrust enforcers to brag about their criminal prosecutions of businessmen. Baer’s little half-joke deserves to be completely condemned.
(This is cross-posted from LaissezFaire.)