Antitrust law and economics has a long and useful history. It is long, because it even predates the enactment of the Sherman Act in 1890. It is useful, as history always is whenever the rule of precedent drives law enforcement. The primary goal of Crane and Hovenkamp’s outstanding collection of reprints of primary sources is precisely to remind antitrust scholars and practitioners of their discipline’s long and useful history—of the circumstance, as they put it, that “fundamental ideas about monopoly, markets, competition, and the state’s regulatory role may cycle in and out, with refinements and modifications, but never go permanently out of fashion” (p. 447). Of central interest to this journal’s readers, the collection also shows as a by-product that antitrust deserves a prominent place in the broader history of modern economics.
The volume covers more than two centuries of legal and economic thinking about competition, from Adam Smith to Oliver Williamson and beyond (the collection also touches on the contemporary so-called post-Chicago approach). Economists are not the only kind of scholars represented, though. Contributions by lawyers, judges, management experts, elite intellectuals, social scientists, and even three US presidents feature in the book. A short essay written by one of the editors introduces each of the twelve chapters. These introductions combine into a sort of mini-history of the subject that would itself suffice to make the volume highly recommended.
The collection’s greatest strength lies in the selected material. Beyond the usual suspects (say, Marshall, Chamberlin, J. Robinson, Berle and Means, Bain, Schumpeter, Arrow, Bork, Posner, etc.), some of the editors’ choices are real—and, what matters most, surprising—gems. I will mention a few, focusing on the less well-known material.
Thomas Cooley’s 1878 essay on the power and limits of state control of private business (Chapter 2) offers an excellent benchmark to understand the movement that a decade later led to the new antitrust legislation. Henry Hatfield’s entertaining report on the 1899 Chicago Trust Conference (in Chapter 3) gives in a dozen pages an extraordinary portrait of the multiple and heterogeneous voices (big and small firms, trade unionists, politicians, academic economists) involved in antitrust debates. The entire fourth chapter, featuring the antitrust views of the three candidates who famously fought in the 1912 presidential election (incumbent Taft, former president Theodore Roosevelt, and eventual winner Wilson), provides the best possible evidence of how crucial the theme of economic power still was for American society in the aftermath of the Supreme Court’s big antitrust decisions against Standard Oil and American Tobacco. Works by Louis Brandeis, Rexford Tugwell, and Thurman Arnold in Chapter 6 cast light on the complex, evolving relationship between antitrust and the New Deal (Crane’s wonderful three-page introduction to this chapter is a must-read too). Especially praiseworthy is the editors’ choice to dedicate Chapter 7 to Richard Hofstadter’s 1964 essay “What Happened to the Antitrust Movement?” Controversial as it might be, Hofstadter’s thesis about the dramatic shift in American society from “an antitrust movement without antitrust prosecutions” to an “antitrust prosecution without antitrust movement” (p. 224) still provides a compulsory reference for anyone wishing to reconstruct the Warren Court’s antitrust era. Also laudable is the inclusion of a whole chapter (Chapter 8) dedicated to Ordoliberalism and the Freiburg School; that is, to the intellectual roots of European competition policy. Franz Böhm’s essay in particular will allow readers to appreciate the different goals and implications that European competition authorities attach to the fight against market power vis-à-vis their American counterparts. Finally, the excerpts from the 1967 Neal Report in Chapter 10 are revealing of the deep crisis in antitrust that would lead a decade later to Chicago courtroom victory.
Of course, the volume is not perfect. I see three main weaknesses. First, as typical in any such collection, every reader will inevitably regret the absence of one favorite piece of work or the other. Personally, I would have appreciated the inclusion of excerpts from Alfred Marshall’s Industry and Trade and, possibly, also from works of other British industrial economists of the time, such as D. H. MacGregor or H. W. Macrosty. Adding this material would have strengthened the editors’ thesis that most modern ideas driving antitrust economics—specifically, ideas about imperfect and monopolistic competition, and/or about vertical and horizontal integration—have older roots than usually believed. Moreover, a giant of 1970s antitrust like Phillip Areeda would have deserved a place in the collection (perhaps jointly with the “second” Donald Turner), if only to exemplify Harvard’s emphasis on the administrability of antitrust rules.
Second, from the viewpoint of historical reconstruction, the editors indulge in an overly simplistic characterization of the rise of neoclassical economics in America. Although they admit that the neoclassical revolution in the US “came later, took longer, and was attended by much more controversy” (p. 6), they never acknowledge (or show in the collection) what these difficulties actually amounted to, or what they eventually entailed for antitrust history. For instance, they fail to recognize—if not rather indirectly—that no unique characterization of neoclassical price theory existed in post-war American economics (Paul Samuelson’s micro was not George Stigler’s micro, or Kenneth Arrow’s), or that traces of the Institutionalist heritage never completely disappeared from antitrust screens.
The third and perhaps most serious drawback is that the collection neglects the historically well-established distinction between two Chicago schools. In the field of promoting and defending competition, a gulf separated the early Chicago of Henry Simons, Frank Knight, and the “first” Aaron Director, from the later views of what is today considered the Chicago school of antitrust—the approach that Director himself masterminded (see his foundational essay with Edward Levy in Chapter 11). Adding to the collection an excerpt from, say, Henry Simons’s 1934 Positive Program for Laissez Faire (a pamphlet that openly invoked strong antitrust action against big business) would have shocked contemporary readers unaware of the distance between the early and the later Chicago. (Incidentally, it would have also explained why the Ordoliberals’ proactive approach to competition policy found more receptive ears in Chicago old guard than in later generations.)
These drawbacks should in no way be taken as a diminution of the collection’s worth. The volume does represent an invaluable addition to the antitrust literature and a very useful reference for the whole antitrust community. That even a masterful collection like this, assembled by two outstanding scholars like Crane and Hovenkamp, may suffer from the above-mentioned shortcomings simply shows that a truly comprehensive history of antitrust law and economics still awaits to be accomplished. Law historians (including the editors themselves) have done a great job in the last twenty years to reconstruct large chunks of that history. Still, it is not casual that the three defects all pertain to its economics part. The time is ripe for historians of economics proper to enter the antitrust field.
