Mapping the dangers of competitive harm
The Cato Institute’s Walter Olson (from whom I originally learned this story), writes that ‘once again real life is making it hard to tell satire from reality’, appealing to the map-maker’s fellow countryman, Frédéric Bastiat, and his ‘Candlemakers’ Petition’:
‘We are suffering from the intolerable competition of a foreign rival, placed, it would seem, in a condition so far superior to ours for the production of light that he absolutely inundates our national market with it at a price fabulously reduced. The moment he shows himself our trade leaves us – all consumers apply to him; and a branch of native industry, having countless ramifications, is all at once rendered completely stagnant. This rival, who is no other than the sun, wages war mercilessly against us…’
To regain their lost trade, the petitioners request of the authorities ‘a law ordering the shutting up of all windows, skylights, dormer-windows, outside and inside shutters, curtains, blinds, bull’s-eyes; in a word, of all openings, holes, chinks, clefts, and fissures, by or through which the light of the sun has been in use to enter houses, to the prejudice of the meritorious manufactures’.
Yet, with respect to Olson, his analogy misses the full extent of the commercial court’s economic outrage. Bastiat’s protectionist candlemakers want to restrict consumers’ patronage of the sun, which does not affect the source of free sunlight. What the French court has granted the map-maker, against Google Maps, is the far more noxious practice of compensating competitive harm.
For Richard Epstein, writing in Free Markets Under Siege, ‘any successful trade may often leave in its wake one or more disappointed competitors who are worse off in this particular instance because of their inability to make the sale. Their competitive loss is a real economic harm, and it is always possible for individuals to ignore the systematic gains from trade and insist that they should receive some sort of compensation for their competitive loss.’
A far better explanation for the French indulgence of competitive harm can be found in another work by Bastiat, The Law:
‘…imagine that this fatal principle has been introduced: under the pretence of organisation, regulation, protection, or encouragement, the law takes property from one person and gives it to another; the law takes the wealth of all and gives it to a few… Under these circumstances, then certainly every class will aspire to grasp the law, and logically so.’
In the ‘Candlemakers’ Petition’ the free economy struggles against protectionist burdens imposed by the state; yet in The Law the free economy is snuffed out of all existence, replaced by the inexorable logic of socialism.
‘The common argument is that economic losses from competition are every bit as real to their victims as those that result from the use of force,’ writes Epstein. ‘If we allow compensation for physical injuries, and injunctions against their future occurrence, then we should do the same for competitive losses, which should likewise be enjoined or compensated (emphasis added).’
Reading Bastiat reaffirms the relentless assault upon free market principles and the readiness of authorities to accommodate producers at the expense of consumers. As Epstein laments, ‘…there must be no compensation or protection against economic losses sustained through the operation of competitive markets. It is a principle that is widely acknowledged and violated in practice.’
Fortunately for freedom advocates, we have both Bastiat and Google Maps to enlighten us. As for French statists and protectionists, plus ça change, plus c’est la même chose.