45 Pages Posted: 5 Jan 2017 Last revised: 31 Jan 2018
Date Written: January 2018
Several American political candidates and administrations have both run and served under the “progressive” banner for more than a century, right through the 2016 election season. For the most part these have pursued interventionist antitrust policies, reflecting a belief that markets are fragile and in need of repair, that certain interest groups require greater protection, or in some cases that antitrust policy is an extended arm of regulation. This paper argues that most of this progressive antitrust policy was misconceived, including that reflected in the 2016 antitrust plank of the Democratic Party. The progressive state is best served by a fundamentally neoclassical antitrust policy whose principal goal is the preservation of market competition as measured by consumer welfare.
Overall, progressive administrations have produced an impressive economic record, at least when compared with real world alternatives. For example, economic growth and job creation during Democrat administrations has been roughly double that than during Republican administrations. But the progressive record in antitrust policy tells a different story, particularly prior to the Clinton administration. Not only have progressives been expansionist in antitrust policy, they also pursued policies that did not fit well into any coherent vision of the economy, often in ways that hindered rather than furthered competitiveness and economic growth. In fact, for much of its history progressive antitrust policy has exhibited fairly strong special interest protectionism.
What should be the role of antitrust in a progressive economy that is more intensively regulated than the one that existed when the antitrust laws were passed? Antitrust could pursue one of three very general routes. First, what it has historically done is develop interventionist approaches that recognize many of the same goals and interest group pressures as regulatory policy generally. Second, it could pursue internally a set of essentially neoclassical goals, limiting its own decision making to markets in which the government has not asserted conflicting regulatory policies. Or third, it could act as a “super-enforcer” of competition, actually limiting or disciplining regulation that conflicts with its own neoclassical principles. The approach suggested here is a version of the second, provided that care be taken to distinguish public from private conduct.
Keywords: Antitrust, Progressivism, Regulation, Capture, Special Interests, Consumer Welfare
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