The court's order this week, requiring a large technology platform to permit competing app stores, is sometimes treated as an interference with the division of labor that has made the firm so productive. I would respectfully observe that the case is more particular than that.

The pin factory in Book I of the Wealth of Nations was productive because each workman specialized in his task and traded his output with others under the discipline of competition. The firm of the present case has done something different. It has not merely specialized in the production of telephones; it has made itself the sovereign of the commerce that passes through them. A toll levied at such a position, set by a single house and answerable to no rival, is — in the categories of political economy — not a price but a tax.

The argument that the firm should be permitted to set whatever toll it likes, because it has built the gate at its own cost, has merit when there are other gates. When there is, in effect, one gate, the institutional question is forced. The market that I described in the Wealth of Nations was always meant to function within a framework of institutions: contract law, anti-monopoly provisions, the courts. The court's order this week is the institutional framework doing precisely the work it was designed to do.

The productive division of labor is preserved by such interventions, not threatened by them. A firm prevented from extracting monopoly rent is not prevented from being productive; it is merely returned to the conditions under which productivity, and not extraction, becomes the path to its prosperity.