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Antitrust Economics on Trial

Antitrust Economics on Trial: A Dialogue on the New Laissez-Faire

Walter Adams
James W. Brock
Copyright Date: 1991
Pages: 146
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  • Book Info
    Antitrust Economics on Trial
    Book Description:

    Is it the central purpose of American antitrust policy to encourage decentralization of economic power? Or is it to promote "consumer welfare"? Is there a painful trade-off between market dominance and economic "efficiency"? What is the proper role of government in this area? In recent years the public policy debate on these core questions has been marked by a cacophony of divergent opinions--theorists against empiricists, apostles of the "new learning" against defenders of the traditional structure-conduct-performance paradigm, "laissez-faire" advocates against "interventionists." Utilizing a distinctively innovative format, Walter Adams and James Brock examine these issues in the context of a courtroom dialogue among a proponent of the new learning (Chicago School), a prosecuting attorney, and a U.S. district judge. In contrast to bloodless "scientific" treatises or ideologically inspired polemical tracts, this book lays bare the central arguments in the debate about free-market economics and the latent assumptions and disguised terminology on which those arguments are based. The dialogue is both gripping and entertaining--designed by the authors to be reminiscent at times of the Theater of the Absurd.

    Originally published in 1991.

    ThePrinceton Legacy Libraryuses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These paperback editions preserve the original texts of these important books while presenting them in durable paperback editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.

    eISBN: 978-1-4008-6255-9
    Subjects: Economics

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. List of Exhibits
    (pp. ix-x)
  4. Introduction
    (pp. xi-xiv)

    For some twenty-five years, a shrill cacophony of divergent opinion has marked the debate on U.S. antitrust policy. Theorists against empiricists. Apostles of the Chicago-based New Learning against defenders of the traditional structure/conduct/performance paradigm. “Laissez-faire” advocates against “interventionists.” “Neoconservatives” against “neoliberals.”

    Aside from the arguments of those who believe that antitrust is a counterproductive anachronism and should be abolished altogether, the debate has centered on the proper role of antitrust in a free enterprise economy. Is the central purpose of antitrust to promote a decentralized decisionmaking mechanism, or is it simply to promote a maximum of “consumer welfare”? Does concentration...

  5. Antitrust Economics on Trial

    • Day 1 The Trial Begins; The Witness Defines Price Theory
      (pp. 3-42)

      Judge: we shall now proceed with the voir dire requested by the Government.

      Attorney: Thank you, Your Honor. [To the witness] Please state for the record your current occupation and title.

      Expert: I am currently professor of economics at the University of Chicago, a fellow at the Cato Institute, and a consultant to the Heritage Foundation.

      Attorney: The Cato Institute and the Heritage Foundation are self-styled libertarian think tanks?

      Expert: They are research organizations inspired by the laissez-faire philosophy and dedicated to the preservation of free enterprise institutions.

      Attorney: what other professional experience have you had?

      Expert: After receiving my...

    • Day 2 The Examination Turns to Horizontal and Vertical Mergers
      (pp. 43-80)

      Judge: You may resume your examination of the expert.

      Attorney: Thank you, Your Honor. [To the witness] Section 7 of the Clayton Act, as amended by the Celler-Kefauver Act, prohibits acquisitions where in any line of commerce in any section of the country the effect “may be to substantially lessen competition or tend to create a monopoly.”

      Expert: Yes.

      Attorney: In enacting this provision, Congress was concerned with what it considered “the rising tide of concentration” …

      Expert: This is the standard,Mark I, all-weather antitrust hobgoblin.105

      Attorney: [Continuing] and wanted to arrest that trend to a lessening of competition...

    • Day 3 Takeover Issues Take Over
      (pp. 81-114)

      Judge: Forecasting is fraught with error, but I’ll go out on a limb and predict that you have some more questions for our expert.

      Attorney: That’s correct, Your Honor.

      Judge: Very well, then, please proceed.

      Attorney: Thank you, Your Honor. [To the witness] Are you familiar with the terms “conglomerate merger” and “conglomerate integration”?

      Expert: Yes. A conglomerate merger is a merger between firms that are neither direct competitors nor in a buyer/seller relationship with each other within the same industry. Thus, a conglomerate merger would be any merger that is not horizontal or vertical. Conglomerate integration refers to a...

    • Day 4 The Impact of Economic Power Is Discussed; Public Policy Interests in Economic Liberty and Democratic Process Yield a Conundrum
      (pp. 115-128)

      Judge: I should like to admonish the attorney that this voir dire has taken more time than I had anticipated. We still have a lengthy trial before us, and we must avoid the temptation to string out these proceedings.

      Attorney: I understand, Your Honor, and I promise to finish examining the witness by lunch this morning.

      Judge: I cannot help but recall the oldAlcoacase, which was launched in 1937 and wasn’t resolved until 1950. At the time I was a young attorney in the Justice Department, and heard a story making the rounds in the antitrust division. One...

  6. Index
    (pp. 129-132)