Antitrust and the Infinite, Circular Supply Chain

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.