American Gothic: How Chicago Economics Distorts 'Consumer Welfare' in Antitrust

35 Pages Posted: 8 Nov 2019 Last revised: 14 Aug 2020

See all articles by Mark Glick

Mark Glick

University of Utah - College of Social & Behavioral Sciences

Date Written: July 1, 2019

Abstract

Since the publication of Robert Bork’s The Antitrust Paradox, lawyers, judges, and many economists have defended “Consumer welfare” (CW) as a standard for decisions about antitrust goals and enforcement priorities. This paper argues that the CW is actually an empty concept and is an inappropriate goal for antitrust. Welfare economists concede that there is no credible measurable link between price and output and human well-being. This means that the concept of CW does not legitimate limited antitrust enforcement, nor does it justify the exclusion of other antitrust goals that require more active enforcement practices. This paper contends that antitrust policy is not welfare based at all, and that if it were, antitrust policy and enforcement would differ significantly from the Chicago School vision. Without the fiction that economists can establish that in the short run lower price and higher output measurably increases welfare more than other goals, recent defenses of the CW standard resolve down to arguments based on unsupported assumptions.

Keywords: Consumer Welfare, Goal of Antitrust Law, New Brandeis School, Chicago School of Economics

JEL Classification: K21, L40, N12

Suggested Citation

Glick, Mark, American Gothic: How Chicago Economics Distorts 'Consumer Welfare' in Antitrust (July 1, 2019). Institute for New Economic Thinking Working Paper Series No. 99, July 2019
https://doi.org/10.36687/inetwp99 , Available at SSRN: https://ssrn.com/abstract=3482111 or http://dx.doi.org/10.2139/ssrn.3482111

Mark Glick (Contact Author)

University of Utah - College of Social & Behavioral Sciences ( email )

United States

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