Chicago, Post-Chicago, and Beyond: Time to Let Go of the 20th Century

Abstract:     
We clarify and defend the Chicago School of antitrust against incorrect and uninformed claims that it represents a narrow set of inefficiency impossibility theorems based on free market ideology. The Chicago School arose decades ago as a reaction to the then current antitrust policies. Chicago prevailed, both as a methodology and in changing antitrust law for the better. That triumph was based primarily on scholarship before 1980, work that focused largely on overthrowing the old order, not on the myriad details that are necessary to implement policy. Moreover, to the extent they addressed implementation issues, prominent Chicago scholars often disagreed.

Despite Chicago’s successes, we argue for the term’s demise. The current popular understanding of the Chicago School of Antitrust as a narrow and uniform ideological approach to antitrust is inaccurate. As a result, the term Chicago, as well as the derivative terms Post- and Neo-Chicago, add little value and are frequently misused to make normatively incorrect points. We therefore add our voices to those who doubt the continuing usefulness of such labels, outside of discussions of antitrust history. We hope to hasten the demise of using labels like Chicago pejoratively and as a substitute for the economic analysis that has been at the core of the Chicago School of Antitrust.

Number of Pages in PDF File: 28

Keywords: Aaron Director, anticompetitive harm, Bell Atlantic Corp. v. Twombly, Edward Levi, error cost, Frank Easterbrook, Herbert Hovenkamp, John McGee, Lester Telser, leverage theories, optimal rules, outcomes, Phillip Areeda, plausibility, predatory pricing, Richard Posner, Robert Bork, Ward Bowman

JEL Classification: B20, B25, K21, L40

Accepted Paper Series