Antitrust and the Infinite, Circular Supply Chain

CPI Antitrust Chronicle (April 2022)

12 Pages Posted: 13 Sep 2022

See all articles by Ramsi Woodcock

Ramsi Woodcock

University of Kentucky College of Law

Date Written: April 28, 2022

Abstract

Supply chains are fundamental to antitrust because no firm can exclude competitors without denying them access to inputs. But this does not mean that antitrust policy can reduce inflation caused by supply chain disruption or effectively redistribute wealth between different levels of a supply chain. Competitive markets do not eliminate profits — or price increases — that are due to scarcity rather than monopoly. In any case, it is impossible to introduce competitive pricing into every link in a supply chain, because supply chains are, technically, infinite. Every atom or fraction of an atom can be defined as a separate component. A firm’s decision not to source each atom or fraction thereof separately shuts down markets for those components, impoverishing those who would otherwise supply them. But requiring firms to source each atom or fraction thereof separately would cause production to grind to a halt. Antimonopolists would instead do well to turn to price controls and taxation to address scarcity-driven inflation and wealth inequality.

Keywords: antitrust, supply chain, scarcity, inequality, monopoly, vertical integration

JEL Classification: L4

Suggested Citation

Woodcock, Ramsi, Antitrust and the Infinite, Circular Supply Chain (April 28, 2022). CPI Antitrust Chronicle (April 2022), Available at SSRN: https://ssrn.com/abstract=4189010

Ramsi Woodcock (Contact Author)

University of Kentucky College of Law ( email )

620 S. Limestone Street
Lexington, KY 40506-0048
United States

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