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by Neville Kennard, veteran preaching and practising capitalist

“Co-operation”, “collaboration” and “collusion”; they are similar expressions meaning slightly different but overlapping things.

Buyers may co-operate — they may assist each other to get the best price perhaps, or the best service; co-operation is seen as good, wholesome, beneficial. We co-operate with each other to our mutual advantage.

And sometimes people collaborate — they may co-operatively and collaboratively work together to gain a benefit for themselves, their customers their friends or family. To collaborate is to gain a benefit for oneself, each-other, one’s customers, members.

And then we may sometimes collude. That is to say, we may choose to co-operate and collaborate with friends or partners in a project, and we may choose to exclude someone we don’t like or trust. We may exclude someone from this venture, not coercively, not with any threat, but just because we choose to. We want to do without this party, and we exercise our freedom to collude to this end.

But while co-operation and collaboration are seen as OK, collusion is seen as not OK.

If force, fraud and coercion are absent, what is the problem? And how do you define “collusion” (which is supposed to be nasty, hence the scare-quotes) and co-operation and collaboration (which are supposed to be nice)?

Competitors may co-operate with their service and pricing arrangements; suppliers may collaborate with each other to get the best deal from a supplier. And they might collude together to exclude another party, for reasons of their own which are of no one else’s business.

But governments, while they themselves are great colluders and behave anti-competitively all the time, try to ban and legislate against collusion.

My experience with attempts at price-fixing and cartels is that they are as strong as their weakest link and quite quickly break down, so any government intervention is redundant. The only free market monopoly that ever lasted, as far as I can ascertain, was the ALCOA monopoly on the supply of aluminium; ALCOA kept aluminium prices down to gain market share — against steel! Their prices were so cheap that no other aluminium producers could compete, so these uncompetitive suppliers did what uncompetitive businesses so often do, they complained to government on anti-trust grounds, and eventually forced Alcoa to raise their prices. So who were the losers and who were the winners from Alcoa’s cheap prices? The customers and the consumers lost, and the uncompetitive producers won.

Collusion is a fact of life. A group of friends may collude to have a game of golf, but they choose to exclude Fred who talks too much. Is this a bad thing, an act of anti-competitive behaviour.

A group of businesses collaborate to do a bulk buy of widgets, but to exclude business X because they simply don’t want to include him, they don’t like him, and this may be labelled collusion.

Nature abhors a vacuum and the market abhors a monopoly. So monopolies seldom last, unless of course the market accepts a monopoly, a sole supplier, because this supplier does a good and acceptable job at an acceptable price, as in the case of Alcoa in the US in 1945, when legislation forced them to increase their prices so other [less efficient] suppliers could compete. Thus Anti-Trust is often Anti Free Market. It can help the uncompetitive and inefficient at the expense of the efficient, and it can hurt customers and consumers.

Often there are natural monopolies, as in the case of a lone petrol station in a country town, or a water-supplier in a city or a lone cinema in a suburb. There may just not be room for another such supplier. But customers can always choose to find alternative ways to satisfy their needs, or choose simply not to buy.

It could be that two petrol stations in adjoining towns agree to sell petrol at the same price, and they should be free to thus “collude”. As long as other suppliers could open up in competition and there is no force fraud or coercion preventing them, then these “colluders” are free to do as they choose.

In Australia we have the Competition and Consumer Commission, headed up at this time by a Graeme Samuel; this tax-payer-funded statist organisation’s mandate is: to “protect consumer rights, business rights, and obligations, perform industry regulation and price monitoring and prevent illegal anti-competitive behaviour”. An impossible and unnecessary ask. In a free market this is all totally redundant; Mr Samuel and his staff could all get real jobs and make a positive contribution, instead of meddling and consuming taxes. We just need to get rid of the regulations and laws that inhibit competition.

The freedom to co-operate, collaborate and collude is a fundamental freedom, and provided there is no force, fraud or coercion, is a freedom we must protect.

(in order of appearance on Economics.org.au)
  1. Welcome from Neville Kennard
  2. Think Tanks Don't Work
  3. "Market Failure": Just what the government ordered!
  4. The Tragedy of the Tax Pool Commons
  5. Corporate Welfare
  6. Citizenship for Sale?
  7. I Don't Vote
  8. Voting: Right or Privilege?
  9. Stockholm Syndrome and our Love-Hate Relationship with Government
  10. Civil Disobedience: The Rules of Engagement
  11. Should Respect for Law Extend to Bad Laws?
  12. Jaywalking as a Demonstration of Individuality
  13. Government Likes War
  14. Collusion is Our Right
  15. Why Not the Drug Olympics?
  16. Unconventional Wisdom
  17. Tiger Farming: An Alternative to Extinction
  18. Looking Backwards: Mont Pelerin Society Conference, Sydney, 2010
  19. Tax Avoidance is a Patriotic Duty
  20. Kennard Writes to IPA Review Editor
  21. Genocide by Welfare: A Tragedy from the Aboriginal Welfare Industry
  22. Separating Sport and State
  23. Your Home is Not an Investment
  24. Dick Smith, Celebrity Philanthropist
  25. A Libertarian's New Year's Resolution
  26. Extend Politicians' Holidays to Create Prosperity
  27. Entrepreneurs are Disruptive, and Bureaucrats Hate It
  28. What is a good Australian?
  29. Governments Like Employment But Hate Employers
  30. The Market Failure Industry
  31. Neville Kennard: The Tax Avoidance Imperative
  32. Wot if ...?
  33. The Tribal Chief and the Witch Doctor
  34. The Tannehills
  35. Democracy versus Property Rights and Prosperity
  36. Government Doesn't Work, and That's the Way They Like It
  37. Minarchy vs Anarchy
  38. Euthanasia and Self-Ownership
  39. The Right Policies to Fix a Depression
  40. Is Howard Our Best PM?
  41. Tax Producers vs Tax Consumers
  42. Where There's a Queue, There's a Business Opportunity
  43. Authoritarian Freedom
  44. Why Classical Liberals Should Debate Anarchocapitalists
  45. The Tyranny of the Majority
  46. If you could choose to whom you paid your tax
  47. Business Should Exploit Boat People
  48. The Immorality of Trade Unions
  49. "America" vs "The United States"
  50. Sweet Anarchy
  51. The Illusion of "Job Creation"
  52. Gold Is Money
  53. Guilty Capitalists
  54. Bureauphobia
  55. Prosperity vs Growth
  56. Capitalism vs Democracy
  57. More people = More fun
  58. Self-Ownership - the very idea!
  59. Government will murder Neville Kennard if he doesn't back away
  60. The Australian Dollar Has Been Cowardly and Criminally Devalued, Harming the Poor Particularly
  61. Is Taxation Theft and Government a Tax Cheat?
  62. My Journey to Anarchy:
    From political and economic agnostic to anarchocapitalist
  63. Government Needs Bad Guys –
    that's why they like wars
  64. What Is Obscene?
  65. Traffic Economics
  66. Wayne Swan stands on the shoulders of other intellectual pygmies
  67. Neville Kennard Obituary
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