Ideology Matters in the Antitrust Debate
This paper was prepared for the Chair’s Showcase Panel, “The Political Hand in American Antitrust—Invisible, Inspirational, or Imaginary?” at the ABA Antitrust Section Annual Spring Meeting, April 11, 2013.
38 Pages Posted: 20 Sep 2013 Last revised: 10 Jun 2014
Date Written: August 14, 2013
The popular perception of modern antitrust is that it has evolved into an economic and technocratic discipline that is largely apolitical and non-ideological. In this paper, I question this perception and argue that ideology does matter in the antitrust debate, particularly with respect to exclusionary conduct and its treatment under Section 2 of the Sherman Act. Ideological differences between antitrust conservatives and liberals have the greatest impact in this area because the competitive effects of dominant firm conduct are often unclear, and the theories offered to support either permissive or restrictive standards are inconclusive. There is also no economic consensus on the competing Schumpeter-Arrow theories as to whether concentrated or competitive markets better spur dynamic efficiency, an important issue in the debate on Section 2 enforcement. Nor are there reliable estimates of the risks and costs of false positives and false negatives, which means that application of a decision-theoretic approach is hardly simply an economic exercise. In this context, it is almost inevitable that a policymaker’s ideology will come into play. Ideological differences that matter include general optimism or pessimism about markets, trust or distrust of government institutions, differing intuitions about dominant firms and the value of competition, and broader social worldviews relating to property rights, economic liberty, merit, fairness, and opportunity. I discuss how and why these differing beliefs may bias one’s choice of theory and interpretation of evidence, bias the decision-theoretic approach to Section 2, and predispose one toward either Schumpeter or Arrow when reliable evidence supporting either theory is lacking. This in turn would obviously affect one’s perspective on appropriate Section 2 policy.
Keywords: antitrust law, antitrust policy, monopolization, Sherman Act section 2, ideology, politics
JEL Classification: K00, K21, L40, L41
Suggested Citation: Suggested Citation