Maurice Stucke, Dec 16, 2010
Antitrust policy in the United States has roughly twenty to thirty year cycles: (i) after initial dormancy, 1900-1920, the promise of antitrust; (ii) 1920s-mid-1930s, antitrust dormancy in the boom and bust years; (iii) mid-1940s-1970s, antitrust representing “the Magna Carta of free enterprise” in preserving economic and political freedom; and (iv) late-1970s-2010, antitrust’s contraction under the Chicago and post-Chicago Schools’ neoclassical economic theories. So if past cycles are reliable indicators of future ones, we are at (or approaching) a new antitrust policy cycle, with 2025 being the approximate midpoint.
Any new policy cycle will be defined by three fundamental questions:
a. What is competition?
b. What are the goals of competition law?
c. What should be the legal standards to promote these goals?
One reason the Chicago School was effective in displacing the existing paradigm was its answering these three questions. For example, in The Antitrust Paradox, Robert Bork first looked at several different definitions of competition. Rejecting competition as rivalry, perfect competition (“utterly useless as a goal of law”), and protection of fragmented markets, Bork settled on his definition of competition, namely as a shorthand expression of consumer welfare, which comported with his goal of competition law. Bork then outlined the legal standards to promote his conception of consumer welfare. C