A Socioeconomic Approach to Antitrust: Unpacking Competition, Consumer Surplus, and Allocative Efficiency
30 Pages Posted: 18 Aug 2015 Last revised: 18 Oct 2017
Date Written: August 17, 2015
The primary function of socioeconomics is to ask questions and broaden the discussion. I have attempted to do that by unpacking and contextualizing the two economic goals of antitrust law – maximizing consumer surplus and allocative efficiency. I have avoided what I believe is today’s faith-based approach as exemplified by the Supreme Court. That approach has now gone beyond economics and seems to reveal, in its most benign form, a deep distrust of government.
At its most basic and obvious level the two antitrust goals cede to those with income – earned or not – the right to determine how scarce resources will be used. That may be fine in many respects and may be far superior to any other method. The problem is that consumer surplus is under-inclusive, recognizes only a small universe of values, and falls well short of measuring actual well-being. When the focus is on allocative efficiency and costs of production, antitrust courts and enforcement agencies are unlikely to recognize all costs and can perpetuate a race to exploit. To the extent the race to exploit is repugnant to some, they may be able to express that in markets but only to a limited extent.
Keywords: socioeconomics, antitrust, consumer surplus, efficiency, guitar, markets, Hovenkamp
JEL Classification: A11, D61
Suggested Citation: Suggested Citation