Advertisement

Dispersion of Power as an Economic Goal of Antitrust Policy

  • Stephen MartinEmail author
Chapter
Part of the Palgrave Studies in the History of Economic Thought book series (PHET)

Abstract

This chapter surveys the range of objectives ascribed to US antitrust policy from its formative period through the early 1970s. Martin discusses and rejects Robert Bork’s analysis of the legislative intent behind the Sherman Act and considers the Kaldor-Hicks potential Pareto improvement principle, a central element of Bork’s argument. An elementary model shows that social preferences about aspects of market performance not captured by consumer surplus or net social welfare can be included in standard economic models. He further argues that the role of economics as a science in analyzing market performance is limited to characterizing the costs and benefits of pursuing alternative policy objectives and that economics as a science is agnostic concerning what policy goals should be.

Keywords

Antitrust Policy Consumer Surplus Market Performance Analysis Clayton Act Consumer Welfare 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Notes

Acknowledgements

I thank the University of Bologna for its hospitality during the sabbatical visit when this chapter was written. I am grateful for comments received during seminar presentations at the University of Bologna, at the 14th annual meeting of the Italian Association for the History of Economic Thought, “Power in the History of Economic Thought”, at the University of Salento, at the Centre for Competition Policy, University of East Anglia, from Nicola Giocoli and Herbert Hovenkamp. Responsibility for errors is my own.

References

  1. Adams, C. F. (1897). The Pace of Corporate Action in Our Civilization. In N. S. Shaler (Ed.), The United States of America (Vol. II, pp. 191–213). New York: D. Appleton and Company.Google Scholar
  2. Adams, H. C. (1887). Relation of the State to Industrial Action. Publications of the American Economic Association, 1, 471–549.Google Scholar
  3. Adams, W., & Brock, J. W. (1987). Antitrust and Efficiency: A Comment. New York University Law Review, 61, 1116–1124.Google Scholar
  4. Adams, W., Brock, J. W., & Obst, N. P. (1991). Pareto Optimality and Antitrust Policy: The Old Chicago and the New Learning. Southern Economic Journal, 58, 1–14.CrossRefGoogle Scholar
  5. Areeda, P. (1983). Introduction to Antitrust Economics. Antitrust Law Journal, 52, 523–537.Google Scholar
  6. Arrow, K. J. (1969). The Organization of Economic Activity: Issues Pertinent to the Choice of Market Versus Non-market Allocation. In The Analysis of Public Expenditure: The PBB System (Vol. I, pp. 59–73). U.S. Joint Economic Committee, 91st Congress, 1st Session, U.S. GPO, Washington, DC.Google Scholar
  7. Arrow, K. J. (1974). The Limits of Organization. New York: W. W. Norton & Company, Inc.Google Scholar
  8. Bok, D. C. (1960). Section 7 of the Clayton Act and the Merging of Law and Economics. Harvard Law Review, 74, 226–355.CrossRefGoogle Scholar
  9. Bork, R. H. (1966). Legislative Intent and the Policy of the Sherman Act. Journal of Law and Economics, 9, 7–48.CrossRefGoogle Scholar
  10. Bork, R. H. (1967). The Goals of Antitrust Policy. American Economic Review, 57, 242–253.Google Scholar
  11. Bork, R. H. (1978). The Antitrust Paradox: A Policy at War With Itself. New York: Basic Books. Second edition, 1993, with a new Introduction and Epilogue.Google Scholar
  12. Brock, J. W., & Obst, N. P. (2009). Market Concentration, Economic Welfare, and Antitrust Policy. Journal of Industry, Competition, and Trade, 9, 65–75.CrossRefGoogle Scholar
  13. Brodley, J. F. (1987). The Economic Goals of Antitrust: Efficiency, Consumer Welfare, and Economic Progress. NYU Law Review, 62, 1020–1053.Google Scholar
  14. Brown, S. G., Director, A., & Weaver, R. M. (27 February 1955). Who are Today’s Conservatives? University of Chicago Roundtable, Number 881.Google Scholar
  15. Chandler, A. D. Jr. (1965). The Railroads: The Nation’s First Big Business. New York: Harcourt, Brace & World, Inc.Google Scholar
  16. Chandler, A. D. Jr. (1977). The Visible Hand: The Managerial Revolution in American Business. Cambridge: Harvard University Press.Google Scholar
  17. Chipman, J. S., & Moore, J. C. (1978). The New Welfare Economics. 1939–1974. International Economic Review, 19, 547–584.CrossRefGoogle Scholar
  18. Clark, J. B. (1900). The Necessity of Suppressing Monopolies while Retaining Trusts. In Chicago Conference on Trusts (pp. 404–409). Chicago Conference on Trusts. Chicago: Civic Federation of Chicago. Reprinted 1973 by Arno Press, Inc.Google Scholar
  19. Crane, D. A. (2015). All I Really Needed to Know About Antitrust I Learned in 1912. Iowa Law Review, 100, 2015–2038.Google Scholar
  20. Destler, C. M. (1953). The Opposition of American Businessmen to Social Control During the Gilded Age. Mississippi Valley Historical Review, 39, 641–672.CrossRefGoogle Scholar
  21. Ellison, G. (1994). Theories of Cartel Stability and the Joint Executive Committee. Rand Journal of Economics, 25, 37–57.CrossRefGoogle Scholar
  22. Farmer, H. (1924). The Economic Background of Frontier Populism. Mississippi Valley Historical Review, 10, 406–427.CrossRefGoogle Scholar
  23. Fetter, F. A. (1932). The Economists’ Committee on Anti-Trust Law Policy. American Economic Review, 22, 465–469.Google Scholar
  24. Fiorito, L. (2013). When Economics Faces the Economy: John Bates Clark and the 1914 Antitrust Legislation. Review of Political Economy, 25, 139–163.CrossRefGoogle Scholar
  25. Fox, E. M. (1981). Modernization of Antitrust: A New Equilibrium. Cornell Law Review, 66, 1140–1192.Google Scholar
  26. Giddings, F. H. (1887). The Persistence of Competition. Political Science Quarterly, 2, 62–78.CrossRefGoogle Scholar
  27. Ginsburg, D. H. (2014). Bork’s ‘Legislative Intent’ and the Courts. Antitrust Law Journal, 79, 941–951.Google Scholar
  28. Giocoli, N. (2015). Old Lady Charm: Explaining the Persistent Appeal of Chicago Antitrust. Journal of Economic Methodology, 22, 96–122.CrossRefGoogle Scholar
  29. Gunton, G. (1888). The Economic and Social Aspect of Trusts. Political Science Quarterly, 3, 385–408.CrossRefGoogle Scholar
  30. Hicks, J. R. (1939). The Foundations of Welfare Economics. Economic Journal, 49, 696–712.CrossRefGoogle Scholar
  31. Hicks, J. R. (1942). Consumers’ Surplus and Index-Numbers. Review of Economic Studies, 9, 126–137.CrossRefGoogle Scholar
  32. Hollander, S. C. (1964). Nineteenth Century Anti-Drummer Legislation in the United States. Business History Review, 38, 479–500.CrossRefGoogle Scholar
  33. Hovenkamp, H. (1982). Distributive Justice and the Antitrust Laws. George Washington Law Review, 51, 1–31.Google Scholar
  34. Hovenkamp, H. (1985). Antitrust Policy after Chicago. Michigan Law Review, 84, 213–284.CrossRefGoogle Scholar
  35. Hovenkamp, H. (1989). Antitrust’s Protected Classes. Michigan Law Review, 88, 1–48.CrossRefGoogle Scholar
  36. Kaldor, N. (1939). Welfare Propositions of Economics and Interpersonal Comparisons of Utility. Economic Journal, 49, 549–552.CrossRefGoogle Scholar
  37. Kanari, T. (2006). J. R. Hicks’ Unpublished Lecture Notes: Another Shot at Welfare Economics, Lecture I. The History of Economic Thought, 48, 84–97.Google Scholar
  38. Kintner, E. W. (1978). The Legislative History of the Federal Antitrust Laws and Related Statutes. New York and London: Chelsea House Publishers.Google Scholar
  39. Kitch, E. W. (1983). The Fire of Truth: A Remembrance of Law and Economics at Chicago, 1932–1970. Journal of Law and Economics, 26, 163–234.CrossRefGoogle Scholar
  40. Koopmans, T. C. (1957). Three Essays on the State of Economic Science. New York and elsewhere: McGraw-Hill.Google Scholar
  41. Lamoreaux, N. R. (1985). The Great Merger Movement in American Business, 1895–1904. Cambridge and elsewhere: Cambridge University Press.Google Scholar
  42. Lande, R. H. (1982). Wealth Transfers as the Original and Primary Concern of Antitrust: The Efficiency Interpretation Challenged. Hastings Law Journal, 34, 65–151.Google Scholar
  43. Manne, H. G. (2005). How Law and Economics was Marketed in a Hostile World: A Very Personal History. In F. Parisi & K. Rowley (Eds.), The Origins of Law and Economics (pp. 309–327). Cheltenham, UK and Northampton, Massachusetts, USA: Edward Elgar.Google Scholar
  44. Marshall, A. (1920). Principles of Economics (8th ed.). London: The Macmillan Press Ltd. http://www.econlib.org/library/Marshall/marP.html.Google Scholar
  45. Martin, D. D. (1959). Mergers and the Clayton Act. Berkeley and Los Angeles: University of California Press.Google Scholar
  46. Martin, S. (2008). The Goals of Antitrust and Competition Policy. In W. D. Collins (Ed.), Issues in Competition Law and Economics (pp. 19–84). Chicago: American Bar Association.Google Scholar
  47. McCurdy, C. W. (1978). American Law and the Marketing Structure of the Large Corporation, 1875–1890. Journal of Economic History, 38, 631–649.CrossRefGoogle Scholar
  48. McCurdy, C. W. (1979). The Knight Sugar Decision of 1895 and the Modernization of American Corporation Law, 1869–1903. Business History Review, 53, 304–342.CrossRefGoogle Scholar
  49. Meyer, J. (2016). Dark Money. New York: Random House.Google Scholar
  50. Miller, G. H. (1954). Origins of the Iowa Granger Law. Mississippi Valley Historical Review, 40, 657–680.CrossRefGoogle Scholar
  51. Newbery, D. M. (1989). Missing Markets: Consequences and Remedies. In F. Hahn (Ed.), The Economics of Missing Markets, Information, and Games (pp. 211–242). Oxford University Press, Oxford.Google Scholar
  52. Peckham, B. W. (1983). Trust Busting Reconsidered: United States v. Corn Products Refining Co. Utah Law Review, 1983, 737–824.Google Scholar
  53. Posner, R. (1979). The Chicago School of Antitrust Analysis. University of Pennsylvania Law Review, 127, 925–948.CrossRefGoogle Scholar
  54. Posner, R. (1987). Legal Formalism, Legal Realism, and the Interpretation of Statutes and the Constitution. Case Western Reserve Law Review, 37, 179–217.Google Scholar
  55. Priest, G. L. (2005). The Rise of Law and Economics: A Memoir of the Early Years. In F. Parisi & C. K. Rowley (Eds.), The Origins of Law and Economics (pp. 350–382). Cheltenham, UK and Northampton, MA, USA: Edward Elgar.Google Scholar
  56. Reder, M. W. (1982). Chicago Economics: Permanence and Change. Journal of Economic Literature, 20, 1–38.Google Scholar
  57. Robbins, L. (1932). An Essay on the Nature and Significance of Economic Science. London: Macmillan.Google Scholar
  58. Robbins, L. (1938). Interpersonal Comparisons of Utility: a Comment. Economic Journal, 48, 635–641.CrossRefGoogle Scholar
  59. Rowe, F. M. (1984). The Decline of Antitrust and the Delusions of Models: The Faustian Pact of Law and Economics. Georgetown Law Journal, 72, 1511–1570.Google Scholar
  60. Selten, R. (1973). A Simple Model of Imperfect Competition, Where 4 are Few and 6 are Many. International Journal of Game Theory, 2, 141–201.CrossRefGoogle Scholar
  61. Simons, H. C. (1936). The Requisites of Free Competition. American Economic Review, 26, 68–76.Google Scholar
  62. Slesnick, D. T. (1998). Empirical Approaches to the Measurement of Welfare. Journal of Economic Literature, 36, 2108–2165.Google Scholar
  63. Stigler, G. J. (1943). The New Welfare Economics. American Economic Review, 33, 355–359.Google Scholar
  64. U.S. Library of Congress (1907). List of Books Relating to Trusts. With References to Periodicals (3rd ed.). Washington: Government Printing Office.Google Scholar
  65. Van Horn, R., Mirowski, P., & Stapleford, T. A. (Eds.) (2011). Building Chicago Economics. Cambridge: Cambridge University Press.Google Scholar
  66. Williams, P. L. (1990). The Attitudes of the Economics Professions in Britain and the United States to the Trust Movement, 1890–1914. In J. D. Hey & D. Winch (Eds.), A Century of Economics (pp. 92–108). Oxford: Basil Blackwell.Google Scholar
  67. Williamson, O. E. (1968). Economies as an Antitrust Defense: the Welfare Tradeoffs. American Economic Review, 58, 18–36.Google Scholar
  68. Winch, D. M. (1965). Consumer’s Surplus and the Compensation Principle. American Economic Review, 55, 395–423.Google Scholar

Copyright information

© The Author(s) 2018

Authors and Affiliations

  1. 1.Purdue UniversityWest LafayetteUSA

Personalised recommendations