An antitrust murder whodunnit
I accuse Judge Bork with the Powell Memo in the smoke-filled room.
40-some years ago, US antitrust enforcement took sick. In the years since, it has been largely comatose — right up until the very recent past, when the Biden administration began to take muscular — but very belated — action to restore a modicum of competition to the economy.
There’s a widely received narrative about what happened to antitrust law. 40+ years ago, fringe economists and other ideological entrepreneurs from the University of Chicago won the argument, publishing such a rigorous defense of monopolies as “efficient” that lawmakers, regulators and judges had no choice but to change their ways.
That is the “enlightened technocrat narrative,” and, as a narrative, you can be forgiven for assuming that it is not empirically testable. But as a trio of scholars show in “The Political Economy of the Decline of Antitrust Enforcement in the United States,” this narrative can and must be subjected to empirical scrutiny.
First, I’ll explain the authors’ conclusion, then I’ll explain the evidence that supports it. The authors conclude that the change in US antitrust enforcement wasn’t the result of reasoned argument, but rather, a mix of financial enticements and a covert influence operation.
They find that the change in antitrust enforcement didn’t arise from:
- public clamor for more monopolies or less competition regulation;
- campaign promises by politicians;
- explicit marching from politicians to the regulators they funded;
- the confirmation hearings for regulators and judges
Instead, the change in antitrust can be causally linked to an increase in lobbying, a revolving door between regulators and the industries they regulate, and lavish “educational” programs aimed at judges that included luxury holidays.
In other words, the complete reversal in antitrust enforcement in the US was not the result of better arguments, nor was it the result of democratic deliberation. Instead, it was a self-accelerating mix of bribery and propaganda…