Recovering the Moral Economy Foundations of the Sherman Act.

AuthorPaul, Sanjukta


Antitrust law is at a crossroads.' In recent years, a number of normative concerns--some of which dissenting voices have long pressed--have reentered the mainstream conversation: instantiating fair economic competition as a realworld process rather than a theoretical ideal; (2) curbing vertical control (3) as a mechanism of economic and market organization and replacing it with more horizontal forms of cooperation; (4) ensuring substantively egalitarian economic outcomes; (5) curbing the outsized influence of the economically powerful in elections and government; (6) and reorienting consumer protection from a narrow view of consumer sovereignty to substantive goals of fairness and consumer protection. (7)

Building on earlier work reconceptualizing antitrust law as the legal organization of economic coordination, (8) this Feature deepens and seeks to provide a foundation for the current normative broadening in the antitrust field and ultimately, in adjacent areas relating to market organization. (9) As normative reconstruction, it may help to guide current reform efforts as well as the interpretation and implementation of the existing antitrust laws. As part of this reconstruction, I reinterpret the legislative history of the Sherman Act, both as to affirmative purpose and as to judicial role. I propose a core prescription: the command to disperse economic coordination rights. This core prescription in turn implies three key tasks: taking affirmative steps to contain domination, to accommodate and promote democratic coordination, and to set rules of fair competition. The notion that antitrust law can be governed by a scientific ideal that transcends contestation over values has understandable appeal but is not logically sustainable. That conclusion both clears the way for and requires particularized normative elaboration, which this Feature aims to provide.

This proposed antitrust prescription draws on a moral economy vision, which takes the social coordination of markets as given, and embraces making and implementing normative choices about market construction as a key regulatory task. This vision runs through each of the three sources I primarily consider: the pre-enactment common law of restraint of trade and its antecedents, nineteenth-century antimonopoly politics, and the Sherman Act's legislative history. The common-law tradition generally viewed markets as socially and legally constituted, rather than self-regulating: from this perspective, the key issues were distinguishing between beneficial and deviant coordination, and enforcing rules of fair competition--rather than punishing coordination as such, or promoting competition as such. (10) The nineteenth-century antimonopoly political vision, grounded in a farmer-labor coalition, offered an egalitarian interpretation of moral economy traditions. This vision critically involved both cultivating democratic coordination and containing domination"--or "power with" rather than

"power over," as it would later be articulated in Progressive thought. (12) Within the moral economy perspective, all markets are understood to be coordinated, and in the antimonopoly vision, democratic coordination is the preferred mode.

The legislative record, too, is continuous with the moral economy framework, which makes sense of legislators' actions better than an analytical framework that revolves around self-regulating markets. While recovery of legislative purpose in antitrust has recently not been in fashion, (13) this account builds on an older literature that has shaped the law and broader thinking. (14) I argue that the core prescription suggested by the legislative history is to disperse economic coordination rights. (15) This prescription entails both containing domination and accommodating democratic coordination, while also carrying forward the emphasis on fair competition already present in the common-law tradition.

The normative thread traced here, culminating in an argument about legislative purpose, is interwoven with an argument about institutional roles. The widely held conventional wisdom is that the Sherman Act is the paradigmatic "common-law statute," entailing a delegation of lawmaking power by Congress to the courts that spans the field of antitrust. (16) The common-law-statute thesis is more than just the proposition that the courts should guide the application of the law as circumstances change. Instead, it has been understood as an effective "blank check" to federal courts to generate the foundational normative criteria according to which the statutory framework will function. (17)

This judicial power enabled the last major paradigm shift in antitrust law, (18) associated with the Chicago School of antitrust thinking. (19) Recent articulations of this judicial primacy reflect how closely connected it is to the substantive content of the legal developments it facilitated: "the Sherman Act can be regarded as 'enabling legislation'--an invitation to the federal courts to learn how businesses and markets work and formulate a set of rules that will make them work in socially efficient ways." (20) A primary basis for judicial primacy in antitrust lawmaking is the notion that by adopting the phrase "restraint of trade" in Section 1 of the Sherman Act, Congress "invoke[d] the common law itself." (21) As a result, according to proponents, the Sherman Act "effectively authorize[s] courts to create new lines of common law." (22) But the legislative history of the Sherman Act undermines both the argument for judicial supremacy and the particular prescriptions with which the most pronounced, current episode of judicial lawmaking has been associated. (23) As such, this Feature contributes to a growing literature that focuses on the institutional character of antitrust decision-making, (24) and specifically builds upon an emerging conversation about the role and character of judicial lawmaking power in the field. (25)

Part I of this Feature addresses the common-law context of the statutory text "restraint of trade," emphasizing its origins in the moral economy concepts of fair price and fair competition. Part II describes the social-movement context to which legislators were responding--namely, the antimonopoly coalition. Part III reinterprets the legislative history itself, arguing that it establishes an underlying decision rule to disperse economic coordination rights. Part IV argues that the strong form of judicial primacy in antitrust decision-making emerged in tandem with relatively recent legal developments, and that the canonical justifications for this approach rely on the normative economic views with which it is associated. Finally, Part V briefly sketches the beginnings of an alternative path forward for implementing the core antitrust prescription described herein.


A major strand of the common-law antecedents of antitrust law was rooted in the perspective of "moral economy." (26) The moral economy perspective is one in which the social coordination of markets is taken as a given, and the relevant normative question about particular instances of economic coordination is not whether they are anticompetitive in the abstract but whether they are fair or unfair. Elsewhere I have argued that even antitrust law today functions in essentially this way, although its normative reasoning is often suppressed in favor of asking simply whether conduct is anticompetitive or not. (27) In the restraint-of-trade case law, which formed an important antecedent for the Sherman Act, (28) such normative reasoning about acceptable and unacceptable market conduct is more frequently on the surface. Indeed, as discussed herein, many of antitrust law's common-law precedents were animated by notions of fairness: they set out positive rules of fair dealing, often assumed fair or just price as an underlying normative benchmark, and sought to define fair competition as an overall legal goal. (29)

The more usual approach is to read the common-law tradition through the elite tradition of classical economics or classical political economy (which certainly informed it as well, particularly in the nineteenth century), rather than through the popular vision signified by moral economy. (30) Reorienting our understanding of antitrust's common-law precedents in this way is significant because it turns us away from the notion of a self-regulating market as a normative benchmark for law, thus also foregrounding questions of fairness as primary and unavoidable. Moreover, the concrete moral economy tradition in which these precedents were embedded was the very same one that led to E.P. Thompson's coinage of the term "moral economy," itself grounded in a popular movement. While the common law itself was heterogenous, the fact that antitrust has roots in this soil of moral economy is both significant and largely neglected.

Approaching the common law through a moral economy lens ultimately also invites an interpretive reorientation regarding the Sherman Act's legislative history. (31) This is important not only for understanding the affirmative legislative purpose, but also because the statutory language invoking the common law of restraint of trade is one of the primary bases for the inference of congressional delegation to courts.

  1. Traditional Market Regulation and the Moral Economy

    The common-law antecedents of antitrust law are best understood in the context of traditional market regulation, or the old moral economy. Antitrust law has its ultimate origins in the doctrines of forestalling, regrating, and engrossing. (32) The beginnings of these doctrines seem to extend more or less as far back as the common law itself. (33) Narrowly, forestalling can be defined as an attempt to sell above the customary price, or otherwise to conduct transactions outside marketing hours and rules; regrating can refer simply to specific methods of...

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