Antitrust and the Triumph of Economics

Institutions, Expertise, and Policy Change

Marc Allen Eisner

• Publisher: The University of North Carolina Press
• Year: 2017
• Print ISBN: 9780807865347, 9780807819555
• eBook ISBN: 9781469639772
• Topic: Economics
• Subtopic: Economic Policy
• Index: Economics

Some of the chief aims of President Ronald Reagan's economic agenda were to reduce the "regulatory burden," minimize state intervention, and reinvigorate market mechanisms. Toward these ends, his administration limited antitrust enforcement to technical cases of price-fixing, invoking the doctrine of the Chicago school of economics. In Antitrust and the Triumph of Economics, Marc Eisner shows that the so-called "Reagan revolution" was but an extension of well-established trends. He examines organizational and procedural changes in the Antitrust Division of the Department of Jusice and the Federal Trade Commission that predated the 1980 election and forced the subsequent redefinition of policy.

During their early years, the Antitrust Division and the FTC gave little attention to economic analysis. In the period following World War II, however, economic analysis assumed an increasingly important role in both agencies, and economists rose in status from being members of support staff to being pivotal decision makers who, in effect, shaped the policies for which elected officials were generally assumed to be responsible.

In the 1960s and 1970s, critical shifts in prevailing economic theory within the academic community were transmitted into the agencies. This had a profound effect on how antitrust was conceptualized in the federal government. Thus, when Ronald Reagan became president in 1981, the antitrust agencies were already pursuing a conservative enforcement program.

Eisner's study challenges dominant explanations of policy change through a focus on institutional evolution. It has important implications for current debates on the state, professionalization, and the delegation of authority.

Originally published in 1991.

A UNC Press Enduring Edition -- UNC Press Enduring Editions use the latest in digital technology to make available again books from our distinguished backlist that were previously out of print. These editions are published unaltered from the original, and are presented in affordable paperback formats, bringing readers both historical and cultural value.

Notes

Chapter One

1. The conflicts surrounding the passage of the antitrust laws were tied to regional economic conflicts. The representatives from the states in the economic periphery supported the legislation, seeking protection from the core economic interests. Once the legislation was in place, the conflicts moved to the national government. The courts resisted the redefinition of the state-economy relationship entailed by the Sherman and Clayton acts. See Sanders, “Industrial Concentration, Sectional Competition, and Antitrust Politics,” and Solo, The Political Authority and the Market System. See the discussion of policy origination in chap. 2.

2. Hofstadter, “What Happened to the Antitrust Movement?” p. 114.

3. Shonfield, Modern Capitalism, p. 329.

4. See Neale and Goyder, The Antitrust Laws of the U.S.A., pp. 439–74.

5. Adams, “Public Policy in a Free Enterprise Economy,” p. 487.

6. Fox, “The Modernization of Antitrust,” p. 1147.

7. Metzenbaum, “Address,” p. 387.

8. See Mueller, “A New Attack on Antitrust.”

9. See Cohodas, “Reagan Seeks Relaxation of Antitrust Laws”; Wines, “Reagan’s Antitrust Line”; and Solomon, “Administration Hopes to Extend the Reagan Revolution to Antitrust.”

10. Neustadt, Presidential Power, p. 26.

11. See Burnham, “The Appearance and Disappearance of the American Voter.”

12. See Edelman, The Symbolic Uses of Politics.

13. See Mitnick, The Political Economy of Regulation, and Fiorina, “Flagellating the Federal Bureaucracy.”

14. See the discussion of congressional resource constraints in Kelman, Making Public Policy, pp. 53–54.

15. See Mayhew, Congress.

16. The term “profession” is not used to describe any occupational grouping that considers itself to be a profession. As used in this book, “profession” can be understood as synonymous with what are usually referred to as the learned professions. Professionalization entails bringing experts into an agency or providing existing professional staffs with a greater role in the definition of agency affairs.

17. See Rourke, Bureaucracy, Politics, and Public Policy, for a discussion of expertise as a foundation of bureaucratic power. This section on the bureaucracy and professionalization reflects, in part, discussions with Russell D. Murphy.

18. Ibid., p. 94.

19. See Moe, “The Politics of Structural Choice.” This section draws on Moe’s discussion of professionalization.

20. Moe, “Interests, Institutions, and Positive Theory,” p. 292.

21. See Scott, “Professionals in Bureaucracies”; Aberbach and Rockman, “Clashing Beliefs within the Executive Branch”; and Richard Hall, “Some Organizational Considerations in the Professional-Organizational Relationship.”

22. Bell, “Professional Values and Organizational Decisionmaking,” pp. 21–22.

23. Ibid., p. 23.

24. See the contributions in James Q. Wilson, The Politics of Regulation.

25. See Dingwall and Lewis, The Sociology of the Professions.

26. See Lambright and Teich, “Scientists and Government.”

27. See Wollan, “Lawyers in Government,” and Abel, “The Transformation of the American Legal Profession.”

28. See Rueschemeyer, “Professional Autonomy and the Social Control of Expertise.”

29. See MacRae, The Social Function of Social Science, p. 13.

30. Whitley, The Intellectual and Social Organization of the Sciences, p. 25.

31. Whitley, “The Structure and Conduct of Economics as a Scientific Field,” p. 2.

32. Ttoo of the best case studies on the antitrust agencies are Weaver, Decision to Prosecute, and Katzmann, Regulatory Bureaucracy.

Chapter Two

1. See the discussion of the original and amended Clayton Act, sec. 7, in Neale and Goyder, The Antitrust Laws of the U.S.A., pp. 181–86.

2. Arnold, The Folklore of Capitalism, p. 372.

3. This discussion draws heavily on Weaver, Decision to Prosecute; Department of Justice, Antitrust Division Manual; Neale and Goyder, The Antitrust Laws of the U.S.A. ; and Andewelt, “Organization and Operation of the Antitrust Division.”

4. See Sullivan, “The Antitrust Division as a Regulatory Agency.”

5. This section draws primarily on Katzmann, Regulatory Bureaucracy; Clarkson and Muris, The Federal Trade Commission since 1970; Federal Trade Commission, Operating Manual of the Federal Trade Commission; Welborn, The Governance of Federal Regulatory Agencies; and Winslow, “Organization and Operation of the Federal Trade Commission.”

6. See Katzmann, Regulatory Bureaucracy, on the changing relationship between law and economics in the Federal Trade Commission. The convergence of law and economics is addressed in some detail in chap. 6 below.

7. See American Bar Association, Report of the Antitrust Law Special Committee to Study the Role of the Federal Trade Commission, pp. 19–22.

8. Ibid., pp. 17–19.

9. See the discussion of the competing economic doctrines and their policy implications in chap. 4 below.

10. Commons, The Legal Foundations of Capitalism, p. 7.

11. See ibid.; Kanel, “Property and Economic Power as Issues in Institutional Economics”; and Calabresi and Melamed, “Property Rules and Inalienability.”

12. See Hurst, Law and Markets in U.S. History.

13. Solo, The Positive State, pp. 38, 37.

14. Ibid., p. 80. Also see Solo, The Political Authority and the Market System.

15. One or more political parties have had an antitrust plank in their platforms in all but four presidential elections in the past century. In the vast majority of cases, the parties have supported antitrust and called for increased enforcement efforts without simultaneously calling for a redirection of priorities. See Johnson, National Party Platforms, and Hofstadter, “What Happened to the Antitrust Movement?”

16. See Sanders, “Industrial Concentration, Sectional Competition, and Antitrust Politics in America.”

17. See James Q. Wilson, Political Organizations.

18. The question of U.S. competitiveness and antitrust is addressed in greater detail in chap. 8 below. See the discussion of antitrust and competition in Porter, The Competitive Advantage of Nations.

19. See Green, Moore, and Wasserstein, The Closed Enterprise System.

20. See Welborn, The Governance of Federal Regulatory Agencies.

21. Federal Trade Commission Act, sec. 1.

22. This account follows the discussion of the relationship bet...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Dedication
• Contents
• Acknowledgments
• One Antitrust and the Redefinition of Public Authority
• Two The Institutions of Antitrust
• Three Three The Historical Legacy: Institutional Conflict, Organizational Impotence, and the Definition of Antitrust
• Four Models, Markets, and Public Authority: The Intellectual Context of Policy Change
• Five The Integration of Law and Economics at the Antitrust Division: From Planning to Process
• Six Economics and Organizational Change: The Revitalization of the Federal Trade Commission
• Seven A Reagan Revolution in Antitrust?: Economics, Ideology, and the Limits of Institutional Change
• Eight The Triumph of Economics: Institutions, Expertise, and Policy Change
• Notes
• Bibliography
• Index