http://mises.org/daily/5618
http://mises.org/daily/5618
AT&T Inc. American owned multi-national, mobile, and fixed telephone communication company in United States tried to buy off T-Mobile’s, a German based mobile service provider, US branch. AT&T’s attempt to buy the US branch of T-Mobile was stopped by the US Government in late August 2011. Although US have a free market economy but the government still reserves the right to intervene and block merges if necessary. The US government argued that the merger will clear out a very big competitive force for AT&T in USA, because T-Mobile is a big low-priced mobile service provider and competitor of AT&T, representing the anti-trust law. Without T-Mobile’s competition AT&T, lacking competitors, will have more freedom to raise prices and have less incentives to keep low competitive prices. Linking to the vodka problem studied in class, the government is trying to interfere with the free-market to insure its freeness, competition, and order yet too much federal interventions of a free-market would create unfairness and disrupted natural patterns. It is better for the market itself to maintain itself and sort its problems; after all free-market’s invisible hand is deemed the most efficient.