A Premature Postmortem on the Chicago School of Antitrust

2019 ◽  
Vol 93 (4) ◽  
pp. 759-776 ◽  
Author(s):  
Daniel A. Crane
Keyword(s):  
Economic Analysis ◽  
Consumer Welfare ◽  
Chicago School ◽  
Vested Interest ◽  
Antitrust Enforcement ◽  
Political Pressure ◽  
The Creation ◽  
Laissez Faire ◽  
Near Term

The Chicago School of antitrust is often thought to have killed off antitrust enforcement beginning in the late 1970s. In fact, although Chicago school prescriptions were significantly more laissez-faire than the structuralist school Chicago replaced, antitrust enforcement did not die under Chicago's influence. Rather, by directing antitrust to focus on technical economic analysis, Chicago contributed to the creation of a large and entrenched class of antitrust professionals—economists and lawyers—with a vested interest in preserving antitrust as a legal and regulatory enterprise. Today, Chicago School's consumer welfare standard and specific enforcement prescriptions are coming increasingly under political pressure and may be replaced or supplemented in the near term. But Chicago's redirection of antitrust toward technical economic analysis and technocratic reasoning seems likely to remain a durable legacy.

scholarly journals American Gothic: How Chicago Economics Distorts “Consumer Welfare” in Antitrust

2019 ◽  
pp. 1-35
Author(s):  
Mark Glick
Keyword(s):  
Well Being ◽  
Consumer Welfare ◽  
Chicago School ◽  
Antitrust Policy ◽  
Lower Price ◽  
Antitrust Enforcement ◽  
American Gothic ◽  
School Vision ◽  
Short Run

Since the publication of Robert Bork’s The Antitrust Paradox, lawyers, judges, and many economists have defended “Consumer welfare” (CW) as a standard for decisions about antitrust goals and enforcement priorities. This paper argues that the CW is actually an empty concept and is an inappropriate goal for antitrust. Welfare economists concede that there is no credible measurable link between price and output and human well-being. This means that the concept of CW does not legitimate limited antitrust enforcement, nor does it justify the exclusion of other antitrust goals that require more active enforcement practices. This paper contends that antitrust policy is not welfare based at all, and that if it were, antitrust policy and enforcement would differ significantly from the Chicago School vision. Without the fiction that economists can establish that in the short run lower price and higher output measurably increases welfare more than other goals, recent defenses of the CW standard resolve down to arguments based on unsupported assumptions.

How Chicago Economics Distorts “Consumer Welfare” in Antitrust

2019 ◽  
Vol 64 (4) ◽  
pp. 495-513
Author(s):  
Mark Glick
Keyword(s):  
Well Being ◽  
Consumer Welfare ◽  
Chicago School ◽  
Antitrust Policy ◽  
Lower Price ◽  
Antitrust Enforcement ◽  
School Vision ◽  
Short Run

Since the publication of Robert Bork’s The Antitrust Paradox, lawyers, judges, and many economists have defended “consumer welfare” (CW) as a standard for decisions about antitrust goals and enforcement priorities. This article argues that the CW is actually an empty concept and is an inappropriate goal for antitrust. Judge Bork adopted CW from economics where welfare unambiguously measured utility or well-being. Welfare economists concede that there is no credible measurable link between price and output and human well-being. This means that the concept of CW does not legitimate limited antitrust enforcement nor does it justify the exclusion of other antitrust goals that require more active enforcement practices. This article contends that antitrust policy is not welfare based at all and, that if it were, antitrust policy and enforcement would differ significantly from the Chicago School vision. Without the fiction that economists can establish that in the short run lower price and higher output measurably increase welfare more than other goals, recent defenses of the CW standard resolve down to arguments based on unsupported assumptions.

The Case for a United Nations Parliamentary Assembly as a Means of Promoting Just Security

2018 ◽  
Author(s):  
Luis Cabrera
Keyword(s):  
United Nations ◽  
General Assembly ◽  
Democratic Accountability ◽  
Un General Assembly ◽  
The Creation ◽  
Near Term ◽  
Over Time

This chapter explores the case for a more formalized United Nations parliamentary assembly, including the potential oversight, accountability, and (ultimately) co-decision roles that such a body could play alongside the UN General Assembly. Given difficulties in expecting national parliamentarians to perform such functions continuously, a UN assembly is found to hold greater potential for promoting key UN system aims in the areas of security, justice, and democratic accountability, even as the existing Inter-Parliamentary Union continued to play some important complementary roles. Learning from relevant global and regional parliamentary bodies, the chapter outlines concrete steps toward developing a parliamentary assembly over time, including the creation of a more informal UN network of UN-focused national parliamentarians in the near term.

Theory in closer contact with industrial life: American institutional economists on competition theory and policy

2021 ◽  
pp. 1-18
Author(s):  
Matthew T. Panhans ◽  
Reinhard Schumacher
Keyword(s):  
20Th Century ◽  
Competition Policy ◽  
Self Regulation ◽  
Consumer Welfare ◽  
Antitrust Enforcement ◽  
Mainstream Economic ◽  
Competition Theory ◽  
One Stage ◽  
Wide Range ◽  
Experimental Attitude

Abstract This paper investigates the views on competition theory and policy of the American institutional economists during the first half of the 20th century. These perspectives contrasted with those of contemporary neoclassical and later mainstream economic approaches. We identify three distinct dimensions to an institutionalist perspective on competition. First, institutionalist approaches focused on describing industry details, so as to bring theory into closer contact with reality. Second, institutionalists emphasized that while competition was sometimes beneficial, it could also be disruptive. Third, institutionalists had a broad view of the objectives of competition policy that extended beyond effects on consumer welfare. Consequently, institutionalists advocated for a wide range of policies to enhance competition, including industrial self-regulation, broad stakeholder representation within corporations, and direct governmental regulations. Their experimental attitude implied that policy would always be evolving, and antitrust enforcement might be only one stage in the development toward a regime of industrial regulation.

Antitrust enforcement in China: merger review and the role of economic analysis

2020 ◽  
Vol 6 (1) ◽  
pp. 89-97
Author(s):  
Elizabeth X. Wang ◽  
Kun Huanh ◽  
Jason J. Wu ◽  
Sophie N. Yang
Keyword(s):  
Economic Analysis ◽  
Antitrust Enforcement

4. What is the optimal level of enforcement?

2021 ◽  
pp. 38-47
Author(s):  
Ariel Ezrachi
Keyword(s):  
Law Enforcement ◽  
Economic Analysis ◽  
Crucial Role ◽  
Competition Law ◽  
Optimal Level ◽  
Competition Law Enforcement ◽  
Laissez Faire ◽  
Economic Understanding ◽  
Competitive Activities

‘What is the optimal level of enforcement?’ focuses on competition law enforcement. All competition jurisdictions acknowledge the central and crucial role of economic analysis in shaping competition prosecution. Greater economic understanding has improved the structure of competition law through legal presumptions and thresholds, enforcement guidelines, and a greater understanding of the gravity and consequences of anti-competitive activities. Indeed, there has been an ever-increasing ‘economization’ of antitrust, as more jurisdictions rely on economic analysis to determine whether intervention is needed. When markets work well, competition enforcers are better off adopting a ‘laissez-faire’ approach (leaving the market to take its own course). Distinguishing pro-competitive activities from anti-competitive activities poses a challenge.

The Antitrust Revolution: Charting the Course of Antitrust Enforcement

2020 ◽  
Vol 65 (4) ◽  
pp. 587-605
Author(s):  
Richard J. Gilbert
Keyword(s):  
Economic Analysis ◽  
Vertical Restraints ◽  
Antitrust Enforcement ◽  
Legal Precedent ◽  
The Revolution

The seven volumes of The Antitrust Revolution published between 1989 and 2019 include dozens of excellent articles that describe topical antitrust cases and the circumstances that motivated them. Taken together, the volumes provide invaluable insights into the course of antitrust enforcement over more than three decades and the factors that influenced the direction of change. This essay follows the course described in the pages of The Antitrust Revolution for two major components of antitrust enforcement: mergers and vertical restraints. The cases demonstrate that economic analysis profoundly impacted merger decisions, although the trajectory has been anything but linear. The revolution was more dramatic for the treatment of vertical price and nonprice restraints of trade. Courts relied on economic principles to upset decades of legal precedent for these arrangements.

6. Competition Policy Defending the Economic Constitution

2017 ◽  
Author(s):  
Stephen Wilks
Keyword(s):  
Economic Analysis ◽  
European Commission ◽  
Competition Policy ◽  
State Aid ◽  
Antitrust Enforcement ◽  
Dominant Position ◽  
Economic Constitution ◽  
Directorate General ◽  
The Law ◽  
Abuse Of Dominant Position

This chapter examines the European Union’s competition policy and how its effectiveness has steadily increased in terms of controlling restrictive practices, abuse of dominant position, mergers, state aid, and the liberalization of utilities. It considers how the central dominance of the Directorate-General for Competition (DG COMP) in the European Commission has been perpetuated and how competition policy has become a supranational policy competence which can be regarded as an ‘economic constitution’ for Europe. The chapter also discusses the decentralization of antitrust enforcement to the national agencies and courts through the ‘Modernization Regulation’ of 2003, as well as a ‘turn to economics’ in which economic analysis has been substituted for legal tests to move towards an ‘effects-based’ (effect on competition) interpretation of the law.

Consumer Welfare Theory as an Ethical Consideration:: An Essay on Hipsters, Invisible Feet, and the “Science” of Economics

2018 ◽  
Vol 63 (4) ◽  
pp. 509-528
Author(s):  
Darren Bush
Keyword(s):  
Consumer Welfare ◽  
Antitrust Policy ◽  
Antitrust Enforcement ◽  
Ethical Considerations ◽  
Legislative History ◽  
Ethical Argument ◽  
Sherman Act ◽  
Policy Goals ◽  
Narrow View ◽  
Definition Of

This article outlines the principle of efficiency as taken from physics and misapplied into the realm of economics. The result of the misapplication has been a narrow view of antitrust policy, culminating in an extremely conservative application of the consumer welfare standard. The result of such policy has been increasing concentration in many industries, abdication of any examination of monopoly power in the context of Section 2 of the Sherman Act, and dogmatic defense of “consumer welfare” as the only scientific approach to antitrust law. Part II reviews of the original goals of antitrust, as viewed without the lens of present-day economic efficiency. These are policy goals as described in legislative history and judicial development of common law. As such, they are ethical considerations distinct from consumer welfare. In part III, the article discusses the central tenets of economics in antitrust policy. These central notions are policy considerations that are misapplications of physics. Part IV discusses the physics definition of efficiency, with some insights as to the issues arising from adopting such a standard in terms of antitrust markets. Part V addresses the failures of antitrust using the lens of physics, explaining that consumer welfare is an ethical argument, not a scientific one. Part VI addresses other potential ethical standards for antitrust enforcement, as well as empirical evidence that support such norms. Part VII offers concluding thoughts where the article argues that there are superior ethical norms that would boost antitrust enforcement and that are consistent with the goals of antitrust.

First Generation Graz Cycle Power Plant for Near-Term Deployment

2011 ◽  
Author(s):  
W. Sanz ◽  
Carl-W. Hustad ◽  
H. Jericha
Keyword(s):  
Power Plant ◽  
Economic Analysis ◽  
First Generation ◽  
Clean Energy ◽  
Operating Conditions ◽  
Design For All ◽  
Demonstration Plant ◽  
Zero Emission ◽  
Near Term ◽  
The U.S

Carbon Capture and Storage (CCS) is a recognized technology pathway to curb the increasing emissions of carbon dioxide (CO2) from the power generation sector. But most available technologies are still on the study or laboratory-scale level, so that considerable R&D efforts are needed to achieve commercialization level. The Graz Cycle originally presented in 1995 by Jericha [1] is an oxyfuel technology and promises highest efficiency using state-of-the-art turbine materials and improved thermodynamic developments in a comparatively complex interaction of rotating machinery, condensers and heat exchanger components. But although detailed conceptual design for all main components has been presented, there is still a large step towards a Graz Cycle pilot demonstration plant. In order to facilitate construction of a demonstration plant we consider the performance of a near-term Graz Cycle process design based on modest cycle data and available turbomachinery components using a simplified flow scheme. The work is supported by on-going development work for a first generation oxyfuel turbine that has already been undertaken by Clean Energy Systems, Inc. [2]. Their further work on a second generation oxyfuel turbine received $30 million funding support from the U.S. Department of Energy in September 2010 [3]. Two near-term Graz Cycle plants are presented based on basic and advanced operating conditions of the proposed commercially available turbine. Besides the turbine the additional equipment for a first-generation cycle is discussed. The predicted optimum net efficiency is 23.2% (HHV). A near-term zero-emission power plant can only be commercially attractive if it will be deployed in a niche market. Therefore an economic analysis commensurate with an early pre-FEED conceptual study is carried out for the U.S. Gulf Coast where revenue from multiple product streams that could include power, steam, CO2 and water, as well as argon and (potentially) nitrogen from the ASU is provided. The economic analysis suggests that a capital investment of $94 million can secure construction of a 13.2 MWe zero emission oxyfuel power plant and yield a 14.5% (unlevered) return on capital invested.

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