Is There a Case to be Made for Political Antitrust?

Asher Schechter at ProMarket:

Is There a Case to be Made for Political Antitrust?: After decades of approaching antitrust through purely economic analyses, are economists once again willing to take into account political considerations as well?Should political considerations play a role in antitrust? In the last four decades, the predominant approach was that antitrust enforcement should only be guided by economic considerations such as efficiency and consumer welfare. Now, if a panel at the recent Stigler Center conference on concentration in America is any indication, it seems that some economists are once again willing to take into account the political dimensions of antitrust.

 In 1979, former FTC chairman Robert Pitofsky published a seminal paper on what he termed the “political content” of antitrust. Contrary to the view that antitrust should be concerned exclusively with economic questions, Pitofsky argued that “political values” should be incorporated into the enforcement of antitrust laws. 

Among those values, Pitofsky listed “the fear that excessive concentration of economic power will foster anti-democratic political pressures, the desire to reduce the range of private discretion by a few in order to enhance individual freedom, and the fear that increased governmental intrusion will become necessary if the economy is dominated by the few.” Ignoring those concerns, Pitofsky asserted, would be tantamount to ignoring “the bases of antitrust” and the “rough political consensus that has supported antitrust enforcement for almost a century.”

The notion that economic power can be politically dangerous has played an integral part in American political culture since the founding of the republic. While in Paris in 1787, Thomas Jefferson famously supported the inclusion of a “restriction against monopolies” in the Bill of Rights. Since then, the fear that concentration of economic power engenders political power has been taken up as a cause by many, most notably by Supreme Court Justice Louis Brandeis in the early 20th century. In the 1930s, University of Chicago economist Henry Simons discussed the anti-democratic nature of monopoly power. “Political liberty can survive only within an effectively competitive economic system,” he wrote. “Thus, the great enemy of democracy is monopoly, in all its forms.” …