A First Principles Approach to Antitrust Enforcement in the Agricultural Industry

12 Pages Posted: 3 May 2010 Last revised: 11 Jan 2015

Geoffrey A. Manne

International Center for Law & Economics (ICLE)

Joshua D. Wright

George Mason University - Antonin Scalia Law School, Faculty

Date Written: April 29, 2010

Abstract

There are very few industries that can attract the attention of Congress, multiple federal and state agencies, consumer groups, economists, antitrust lawyers, the business community, farmers, ranchers, and academics as the agriculture workshops have. Of course, with intense interest from stakeholders comes intense pressure from potential winners and losers in the political process, heated disagreement over how gains from trade should be distributed among various stakeholders, and certainly a variety of competing views over the correct approach to competition policy in agriculture markets. These pressures have the potential to distract antitrust analysis from its core mission: protecting competition and consumer welfare. While imperfect, the economic approach to antitrust that has generated remarkable improvements in outcomes over the last fifty years has rejected simplistic and misleading notions that antitrust is meant to protect “small dealers and worthy men” or to fulfill non-economic objectives; that market concentration is a predictor of market performance; or that competition policy and intellectual property cannot peacefully co-exist. Unfortunately, in the run-up to and during the workshops much of the policy rhetoric encouraged adopting these outdated antitrust approaches, especially ones that would favor one group of stakeholders over another rather than protecting the competitive process. In this essay, we argue that a first principles approach to antitrust analysis is required to guarantee the benefits of competition in the agricultural sector, and discuss three fundamental principles of modern antitrust that, at times, appear to be given short-shrift in the recent debate.

Keywords: biotech, Charles Chuck Grassley, Christine Varney, Commodity Futures Trading Commission, Congress, DOA, error costs, FTC, Federal Trade Commission, GAO, Harold Demsetz, innovation, Justice Department, Kovacic, Monsanto, politics, Richard Posner, seeds, Shapiro, Timothy Muris

JEL Classification: D21, D23, D42, D43, K00, K21, L10, L12, L13, L22, L23, L40, L42, L66, O38, Q16, Q18

Suggested Citation

Manne, Geoffrey A. and Wright, Joshua D., A First Principles Approach to Antitrust Enforcement in the Agricultural Industry (April 29, 2010). CPI Antitrust Chronicle, Vol. 5, No. 2, Spring 2010; Lewis & Clark Law School Legal Studies Research Paper No. 2010-15; George Mason Law & Economics Research Paper No. 10-31. Available at SSRN: https://ssrn.com/abstract=1598542

Geoffrey A. Manne (Contact Author)

International Center for Law & Economics (ICLE) ( email )

3333 NE Sandy Blvd
Suite 207
Portland, OR Oregon 97232
United States
503-770-0076 (Phone)

HOME PAGE: http://www.laweconcenter.org

Joshua D. Wright

George Mason University - Antonin Scalia Law School, Faculty ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States

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