Antitrust policy is part of a subset of policies (e.g., corporate law, labor legislation, and regulatory
law) focused on the perceived negative consequences attendant to the rise, expansion, and dominance
of big business. The hunt for ever-higher profits by big business has yielded significant economic
progress, but has also often spawned anticompetitive behavior, harm to the other classes in society,
including labor and small business, and created macroeconomic instability.
These forms of harm, as
Joseph Schumpeter observed, can result in suboptimal economic performance and the impairment of
For example, when big business prevents real wages from increasing, it can
erode economic incentives to innovate.
Antitrust has traditionally sought to protect and enhance the
competitive process as its policy tool to address such issues.
The first section of this article identifies six epochs in the economic history of the United States,
reflecting the milestones and transition periods in the development of antitrust law.
To be clear, this
article does not purport to fully address the economic history of these eras. Its principal objective is to
show that over these six economic epochs, there were three major policy regimes each reflecting quite
distinct antitrust approaches. Up to the Great Depression, policy in the United States was broadly
associated with laissez-faire consisting of an unmanaged economy and adherence to the gold standard.
Although several new antitrust statutes emerged under this policy regime, there was minimal antitrust
enforcement. This changed dramatically after the Great Depression. In the later part of the New Deal, a
new policy consensus emerged that included strong regulation of finance, income equalization, high
wages, support for unions, and strong antitrust enforcement. As detailed below, this new policy regime
coincides with the greatest period of economic growth and prosperity in U.S. history. During the crisis
of the 1970s, neoliberalism rose to policy prominence. This new policy regime expressed confidence
that the unfettered actions of big business would result in positive economic outcomes for everyone.
The Chicago School of antitrust is an integral part of the neoliberal policy program. This policy regime
has resulted in significantly inferior economic performance compared with the New Deal policy that it
I. The Periodization of Antitrust History
This section introduces the long-term data series of the rate of profit in the United States from 1869 to
2015 as a device to help illustrate the periodization of antitrust history.
The periodization adopted here
1. For an economic model and evidence on this point, see G´eRARD DUM´eNIL AND DOMINIQUE LEVY,THE ECONOMICS OF THE PROFIT
RATE, Chs. 11 and 12 (1993); G´erard Dum ´enil & Dominique Levy, Profitability and Stability, in PROFITS,DEFICITS AND
INSTABILITY (D.B. Papadimitriou ed., 1992).
2. JOSEPH SCHUMPETER,CAPITALISM,SOCIALISM AND DEMOCRACY 76 (1950) (“But between realizing that hunting for a maximum of
profit and striving for maximum productive performance are not necessarily compatible ....”).
3. Economists as diverse as John Hicks and Karl Marx have recognized the notion that high wages create incentives to innovate.
JOHN HICK,THE THEORY OF WAGES 124–25 (1932); KARL MARX,CAPITAL VOL I (1971) ch. 15, § 3. See, e.g., H. J. HABAKKUK,
AMERICAN AND BRITISH TECHNOLOGY IN THE NINETEENTH CENTURY:SEARCH FOR LABOR SAVING INVENTIONS (1962); ROBERT C.
ALLEN,GLOBAL ECONOMIC HISTORY:AVERY SHORT INTRODUCTION 33 (2011). G´erard Dum´enil & Dominique Levy, A Stochastic
Model of Technical Change, Applications to the U.S. Economy (1869-1985),46M
ETROECONOMICA 213 (1995); G ´erard
Dum´enil & Dom inique Levy, Competing Factors in Inducement of Technical Progress (CEPREM AP Working Paper,
1989); ROBERT J. GORDON,THE RISE AND FALL OF AMERICAN GROWTH:THE U.S. STANDARD OF LIVING SINCE THE CIVIL WAR
563 (2016); Lance Taylor & Ozlem Omer, Race to the Bottom: Low Productivity, Market Power, and Lagging Wages (INET
Working Paper No. 80, Aug. 8, 2018), at 5. Additional references can be found in VERNON RUTTAN,ISWAR NECESSARY FOR
ECONOMIC GROWTH:MILITARY PROCUREMENT AND TECHNOLOGY DEVELOPMENT 9–11 (2006).
4. The dating of these economic epochs derive from an earlier paper, G´erard Dum´enil, et al., The History of Economic Policy as
NTITRUST BULL. 373 (1997). I have made modifications to this earlier periodization in order to capture
the changing antitrust policy approaches.
5. The data come from G´erard Dum ´enil & Dominique Levy, The historical trends of technology and distribution in the U.S.
economy. Data and figures (since 1869), 2016; Appendix 1 reproduces these data.
296 The Antitrust Bulletin 64(3)