Reconsidering Antitrust's Goals

Abstract

Antitrust policy today is an anomaly. On the one hand, antitrust is thriving internationally. On the other hand, antitrust’s influence has diminished domestically. Over the past thirty years, there have been fewer antitrust investigations and private actions. Today the Supreme Court complains about antitrust suits, and places greater faith in the antitrust function being subsumed in a regulatory framework. So what happened to the antitrust movement in the United States?

Two import factors contributed to antitrust policy’s domestic decline. The first is salience, especially the salience of the U.S. antitrust goals. In the past thirty years, enforcers and courts abandoned antitrust’s political, social, and moral goals, in their quest for a single economic goal. Second antitrust policy increasingly relied on an incomplete, distorted conception of competition. Adopting the Chicago School’s simplifying assumptions of self-correcting markets composed of rational, self-interested market participants, the courts and enforcers sacrificed important political, social, and moral values to promote certain economic beliefs.

With the anger over taxpayer bailouts for firms deemed too-big-and-integral-to-fail, the wealth inequality that accelerated over the past thirty years, and the current budget cuts and austerity measures, the United States is ripe for a new antitrust policy cycle.

This Article first summarizes the quest during the past 30 years for a single economic goal. It discusses why this quest failed. Four oft-cited economic goals (ensuring an effective competitive process, promoting consumer welfare, maximizing efficiency, and ensuring economic freedom) never unified antitrust analysis. After discussing why it is unrealistic to believe that a single well-defined antitrust objective exists, the Article proposes how to account antitrust’s multiple policy objectives into the legal framework. It outlines a blended goal approach, and the benefits of this approach in providing better legal standards and reviving antitrust’s relevance.

Keywords: Sherman Act, Clayton Act, Antitrust, Behavioral Economics, Well Being, Monopoly, Too-Big-To-Fail, Mergers

JEL Classification: K21, L40, L41, L42, L43, L44