ABSTRACT
Systematic criticism of outcomes logically involves criticism of the process producing those outcomes. Similarly, approval of a process producing an order entails approval of the resultant order. Airlines have had great difficulty in coping with the transition from a regulated to a competitive environment, in part because most of it took place during one of the most severe of postwar recessions. It is also true however that, to all intents and purposes, airlines had always been regulated. Regardless of recent attention paid to particular issues or problems of dynamic competition (e.g., advertising), economic theorists still employ static analysis of competition and monopoly. Similarly, though a few observers have proposed using tax policy to influence monopolists, policy-makers generally weigh choices between regulation and antitrust for monopoly problems. We argue our position by reference to two concrete examples: control of pollution, and control of monopoly. Our concern in this section, however, is with the economics of public policy toward monopoly.
