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19 Ocean L. Memo 1 (1980)

handle is hein.journals/ocoaslme19 and id is 1 raw text is: 

Ocean and Coastal  Law Center * School of Law  - University of Oregon - Eugene  97403

   l Ocea Law M emo

              Issue 9                                                Octber  1,  198


    Just about everyone involved with fish-
ing knows by now that the fishing industry
is and has been under scrutiny by state
and federal authorities looking for vio-
lations of the various antitrust statutes.
The United States attorney in San Fran-
cisco in conjunction with a federal grand
jury is conducting a broad investigation
of the West Coast fishing industry.  Sev-
eral hundred subpoenas have been issued
to processors and marketing associations
requesting information about marketing
practices  over the last five years.  Ag-
grieved private parties are also showing
interest in private enforcement of anti-
trust laws.

    These developments have generated a
lot of confusion about antitrust laws and
how they limit certain activities in the
fishing industry.  This Ocean Law Memo
attempts to clarify the situation by
discussing the policy justifications for
having such laws and by describing the
relevant state and federal laws and their
possible applicability to the fishing in-

       Economics of Competition

    Antitrust laws, both state and federal,
are legislative enactments to control
private economic activity.  The basic aim
of these laws is to preserve for society
the benefits of free and open competition.
To this end they condemn and provide
punishment for activities which tend to
restrict competition or restrain trade.

    Justifying the existence of these laws
requires justifying their aim, the pre-
servation of competition.  Various argu-
ments have been advanced supporting compe-
tition as a desirable condition in the
market place.  Among the most convincing

(1)  Competition promotes efficiency and
progress.  Competitors must attempt to
reduce their costs and improve their pro-

ducts to maintTin their market positions.
Competition also forces the movement of
capital from areas of decreasing demand
to areas of increasing demand.  As certain
business activities become marginally
profitable because of competition for the
available buyers, business capital will
tend to move into areas or activities
where competition is not so great.  The
winners theoretically are all of us in our
role as consumers; we get a better product
at a lower price.

(2)  Competition provides economic stabil-
ity; competition induces continuous market
adjustments through the economics of
supply and demand.  Ruinous plunges in
market conditions are avoided by spreading
recessionary effects out over time.

(3)  Competitive pricing tends to encour-
age the distribution of income proportional
to an individual's productive efforts.
It helps insure that rewards (income) are
distributed rationally according to success
in meeting the needs of the market place.

(4)  Competition has value independent of
its effects on the market place.  The op-
portunity to compete in a free market can
be valued as an aspect of liberty; an
opportunity to carry on business and suc-
ceed or fail on the basis of merit.

(5)  Competition checks the power of giant
corporations or combines to control market
conditions.  At the same time it helps
minimize the effects of financial power in
its social and political aspects.  Our in-
herent distrust of concentrated power is
eased by the knowledge that competitive
market conditions will, in most cases, help
keep an economic power under control.

    To preserve these benefits of compe-
tition certain conditions must be maintained
in the market place.  For any commodity or

(1)  There must be an appreciable number of

Distributed by: OSU Extension Service' Sea Grant Marine Advisory Program, Corvallis, OR 97331

Issue 19

October 15, 1980

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