I keep hearing that Robert Bork’s book, The Antitrust Paradox (TAP) is terribly important. For example:
Robert Bork is the single most important person in antitrust in America….
In 1960, he was concerned the socialists would take over the country through antitrust. Antitrust then was about protecting small businesses. He built a full framework about how antitrust should be more about economic efficiency than about helping small businesses.
Anyone who was concerned that socialists would take over the country by any means was a loony. And by antitrust? Good grief.
And anyone who understands the history of why anti-trust laws were adopted knows that in truly competitive markets, no producer has any pricing power–they’re all small producers. It was the depredations of big business against small business not through pricing power but through non-monetary means (like dynamite) that led to the anti-trust laws. The progressives of a century ago understood that unless small business can operate in a market, the market is not competitive.
And again, from the same source:
Bork came around and said that we were protecting inefficient businesses. …He created this framework where antitrust should be efficient. He introduced economics into antitrust in a really systematic matter.
But economic efficiency is very different when one starts looking at spillover effects. And these were well known when Bork wrote TAP. Yes, Wal-Mart produces low low prices… at the expense of bribery in Mexico, slavery in China, and retail unemployment and union-busting in the US. The progressives of a century ago knew these things! So it seems to me that what Bork did, in effect, was to unlearn over a century worth of wisdom and resurrect discredited arguments from the Gilded Age.
Supposedly, much of the error in Bork’s thinking came from believing the efficient markets hypothesis. But I think the error was rooted more in seeing Big Business as progress, an idea that was enshrined in corporate socialism/fascism.
Am I missing something? Has anyone read TAP? Is there virtue in Bork that I am just not seeing?
As I commented on DK, I believe that the purpose of law is to establish justice. When the courts get involved in deciding what is economically efficient, they are doing in effect what the Soviet state did in central planning. The courts should only intervene in markets when the other two branches have instructed them to intervene.
(adapted from a comment at Lawyers, Guns, and Money)