Law's Honour Lost: The Plight of Antitrust

DOI10.1177/0003603X8603100205
AuthorFred S. McChesney
Date01 June 1986
Published date01 June 1986
Subject MatterArticle
The Antitrust Bulletin/Summer 1986
Law's honour lost:
the plight
of
antitrust
BY FRED S. McCHESNEY*
359
"What is left when honor is lost?" asked a Roman philosopher
2,000 years ago. The question might well be asked
of
our system
of
antitrust law and enforcement as antitrust nears its centenary.
The honor lost by antitrust in the past 15 years has been
substantial, to the point where the legitimacy of its role in a
competitive order is disappearing altogether. That problem, and
how the legal and enforcement authorities respond to it, is the
single biggest issue facing antitrust for the coming years.
The loss in legitimacy stems from a growing perception that
antitrust is no longer a guarantor or protector
of
competition (if,
indeed, it ever was). Though lip service still is paid to the
importance of the antitrust laws in defending competition, anti-
trust is increasingly seen as either irrelevant or, worse, deleterious
to competition. In this article, I identify several sources
of
these
Emory University School
of
Law. Currently
John
M. Olin
Fellow in Law &Economics, University
of
Chicago Law School.
AUTHOR'S NOTE: Comments on an earlier draft from William MacLeod,
Thomas Morgan, Robert Rogowsky, William Shughart, E. Thomas
Sullivan, and E. G. West are gratefully acknowledged. Discussions with
Thomas Arthur during preparation
of
this article were particularly
helpful.
©1986by Federal Legal Publications. Inc.
360 The antitrust bulletin
changing perceptions concerning antitrust. I then discuss what the
loss
of
legitimacy will mean for the future
of
antitrust.
1. Competition and government
The conventional wisdom sees the antitrust laws as our "com-
petitive constitution," and the Sherman Act in particular as the
"Magna Carta
of
free enterprise." Born in that gilded era
of
"robber barons" and their "greedy trusts," the Sherman Act put
the government in the business
of
saving consumers from the
higher prices and restricted outputs that, supposedly, would
characterize the untrammeled operation
of
free enterprise.
Whether such purity of political motive truly explains the
Sherman Act is questionable, as discussed below. Initially, how-
ever, it is important to note the model
of
the economy implicit in
the passage
of
the act. The notion
of
the government as guaran-
teeing competition by attacking private trusts presupposes, first,
that private actors pose significant dangers to competition, and,
second, that government can be depended on to fight for in-
creased competition. Neither supposition appears warranted.
Several strains
of
scholarly work on the sources
of
monopoly
and market power have raised doubts about the importance
of
private attempts to impair competition. Industries accused by the
Fifty-first Congress in 1890
of
restricting output to raise prices
were actually increasing output, in some cases expanding produc-
tion 10 times faster than increases in GNp'l Relative prices
of
the
goods produced by the alleged trusts were falling prior to passage
of
the Sherman Act. Recent attempts to locate significant supra-
competitive profits from the most obviously anticompetitive be-
havior, price-fixing, have failed. 2Measure after measure has
IDiLorenzo, The Origins
of
Antitrust:
An
Interest-Group
Per-
spective, 5
INT.
REV. L. &
ECON.
73 (1985).
2Asch &Seneca, Is Collusion Profitable?, 58 REV.
ECON.
&
STAT.
1
(1976).

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