[simonh]

"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices." - From 'The Wealth of Nations' by Adam Smith.

What a Marxist!

[nickik]

Smith was actually right. Every economist would agree that he is right. The problem is just that you don't understand him.

“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages”

The point is that they conspire as long as they want, they will not succeed. Smith understood that.

Also, Smith was quite a bit more sophisticated when it came to human behavior, see his other book "The Theory of Moral Sentiment".

[dragonwriter]

> The point is that they conspire as long as they want, they will not succeed. Smith understood that.

No, actually, Smith understood that they regularly did succeed, and wrote directly in warning about that; from the conclusion to Chapter 11 of Book 1 of The Wealth of Nations:

“The interest of the dealers, however, in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public. To widen the market and to narrow the competition, is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens. The proposal of any new law or regulation of commerce which comes from this order ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.”

[nickik]

What are you talking about, he is making my point exactly.

> any new law or regulation of commerce which comes from this order ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined

He was afraid they would use the state to create laws in their benefit. Not that they could use market power to beat competition. Nothing in this paragraph indicates that he thinks markets by itself were centralized.

The AntiTrust law is an exact example of what Smith is talking about. Its a proposal that looks like it would help markets but actually its a tool for the weak competition to beat the stronger competition.