2. The Case Against Antitrust Policy

The uptick in antitrust enforcement and the irrational attack on Microsoft should not distract us from the larger and longer picture: the intellectual case against antitrust regulation has been building for decades.

The most important theoretical development has been the increasing professional disenchantment with the so-called barriers-to-entry doctrine.¹ This doctrine held that certain economic obstacles prevented smaller firms from competing with so-called dominant firms, that barriers enhanced the market power of these leading companies, and that they served to harm consumer welfare. Yet, most of these alleged barriers have proven to be economies and efficiencies that leading firms have earned in the market-place. Efficiency and successful product differentiation can certainly limit rivalry with firms unable to match or surpass such innovation; superior economic performance can make it difficult for new firms to enter markets or for old firms to expand their market shares. But none of this is unfair or unfortunate from any consumer perspective, and none of it can rationalize an antitrust attack on the firms with the superior performance.

A reexamination of the antitrust case evidence also tended to support administrative reforms in antitrust policy. By at least the mid 1970s it was becoming clear that much of the antitrust case history did not confirm the resource misallocations suggested by orthodox monopoly theory. Indeed, economic analysis of the leading antitrust cases tended to demonstrate that the indicted corporations had increased their outputs and lowered their prices and had behaved generally as competitive firms would be expected to behave in open markets facing direct or potential rivalry.² The thrust of antitrust policy in these cases was, if anything, to restrain the competitive performance of the leading firm and thus protect the existing market structure of generally smaller, less efficient business organizations.

The IBM Case

These findings were perhaps best exemplified in U.S. v. IBM,³ the disastrous government antitrust case against the International Business Machines Corporation (IBM) that contributed significantly to the movement away from traditional antitrust policy. IBM was indicted by the Department of Justice in 1969 and charged with illegal monopolization of the general-purpose digital-computer-systems market. The suit held that IBM had systematically engaged in certain exclusionary business practices that tended to restrain trade and create a monopoly in violation of the Sherman Antitrust Act (1890). The case finally went to trial in 1975. After more than six years in court and a trial transcript of more than 104,000 pages, the case was abandoned by the government in 1982.

It was clear from the start that this government antitrust case and the many private antitrust cases against IBM⁴were all fundamentally misguided. They were, in brief, attacks on entrepreneurial success and efficiency. Clearly, IBM had not restricted production to raise prices and profits; nor had it repressed invention and innovation. On the contrary, IBM had achieved its considerable success and market share by taking unprecedented research-and-development risks, innovating superior products, and developing an unsurpassed, long-term corporate commitment to customer-support services.⁵ Most of the alleged unfair practices, such as educational discounts and bundled hardware and software, were only “exclusionary” of less efficient sellers—some larger than IBM, some smaller—that could not match IBM’s overall market performance.

In addition, and contrary to the assertions of the government and the private plaintiffs, IBM’s considerable business success had not hurt the overall growth of non-IBM companies and the data-processing industry generally. IBM had grown rapidly, but the industry had grown far more rapidly; IBM’s share of domestic electronic data-processing revenues declined from 78 percent in 1952 to 33 percent in 1972, hardly persuasive evidence of any monopolization.⁶ Assistant Attorney General William Baxter understood the true state of affairs when, in 1982, his office withdrew its absurd legal action, terming it “without merit.”⁷

The collapse of the concentration doctrine also strongly influenced a new direction in antitrust policy.⁸ Early empirical work in industrial organization had appeared to discover a slight positive correlation between market concentration (the percentage of the market sales or assets controlled by a small group of firms, usually four) and the average profits earned by firms in such markets. Most of these studies assumed that the so-called barriers to entry mentioned above limited competition in the concentrated industries and allowed firms monopoly profits.⁹

Later research argued, however, that the higher profits in the concentrated markets were more logically explained by the fact that the leading firms had lower costs and that these efficient firms had grown more quickly than the less efficient firms. In addition, over the long run, profit rates tended to decline in the high-concentration markets and to increase in the low-concentration markets, indicating that the competitive-market process of resource reallocation was alive and well. In short, evidence from the so-called new learning undercut much of the rationale for the traditional antitrust regulation of market concentration and high-market share.¹⁰ A new direction in antitrust policy was inevitable and emerged in the 1980s.

But not all traditional antitrust policies were abandoned. Antitrust was still very much concerned with price-fixing and market-division agreements between competitors (horizontal agreements), and neither the antitrust authorities nor the courts relaxed their position that such arrangements were normally illegal per se. In addition, certain interfirm cooperative joint ventures were still subject to regulation by the appropriate antitrust authorities. Resale price maintenance and so-called predatory practices remained illegal under the antitrust laws. The Department of Justice and the Federal Trade Commission still regulated horizontal mergers through revised merger guidelines. And although the merger attitudes and guidelines were somewhat more relaxed than they had been in previous years, the antitrust authorities continued to intervene in certain beer, office supply, and telecommunications industry consolidations. In short, although the focus of antitrust enforcement changed somewhat in the 1980s and early 1990s, the antitrust authorities still remained active in the areas of price fixing, mergers, and restrictive practices, where it was alleged that firms were able to harm social welfare.

There has been some progress made in moving away from the gross irrationalities of old-style traditional enforcement. And some critics of traditional enforcement might be tempted to be content with these modest administrative changes, or even more tempted to call for additional reform, such as the general adoption of a rule of reason with respect to certain “restrictive” practices, such as tying agreements or resale price-maintenance contracts. But the resurgence of antitrust enforcement in the 1990s indicates that this reform approach is naive. Thus, it will be argued below that even additional reforms will not be sufficient and that the case against antitrust regulation is strong enough to justify the complete repeal of all the laws.

The Case for Repeal

The case for the repeal of the antitrust laws can be summarized as follows:

First, the laws misconstrue the fundamental nature of both competition and monopoly. Competition is an open market process of discovery and adjustment, under conditions of uncertainty, that can include interfirm rivalry as well as interfirm cooperation. Within this competitive process, a firm’s market share is not its market power, but a reflection of its overall efficiency. Monopoly power, on the other hand, is always associated with legal, third-party restraints on either business rivalry or cooperation, not with strictly free-market activity.

Second, the history of antitrust regulation reveals that the laws have often served to shelter high-cost, inefficient firms from the lower prices and innovations of competitors. This protectionism is most obvious in private antitrust cases (in which one firm sues another) which constitute more than 90 percent of all antitrust litigation.

Third, some of the antitrust laws, such as section 2 of the Clayton Act (1914) and the Robinson-Patman Act (1936), explicitly intend to restrict price rivalry in the name of preserving competition. Government antitrust suits against firms that price discriminate almost always result in the defendant firm raising some of its prices to comply with the law.

Fourth, section 7 of the Clayton Act, which restricts mergers that may tend to lessen competition, is itself destructive of the competitive process. Restricting mergers and takeovers may inhibit the flow of production into the hands of more efficient managers. The anti-competitive effect of section 7 is especially evident in vertical integration antitrust cases and in cases in which poorly performing domestic firms may require merger or other forms of cooperation in order to compete more successfully with foreign firms. Even with somewhat relaxed attitudes toward some mergers and with revised merger guidelines, the FTC and the Antitrust Division of the Justice Department have continued to regulate, delay, and oppose many important business consolidations.

Fifth, the antitrust laws are a form of government regulation, and, like all government regulation, they tend to make the economy less efficient. In the name of preserving competition, the efficient competitive process has itself been impeded by antitrust intervention. Firms that intend to lower their prices may be restricted from doing so by antitrust law. Even more important and pernicious, firms that would innovate some new process or product must consider whether the innovation will give them an “unfair” competitive advantage or be termed “predatory” by the antitrust regulators or some competitor.

Sixth, the enforcement of the antitrust laws is predicated on the mistaken assumption that regulators and the courts can have access to information concerning social benefits, social costs, and efficiency that is simply unavailable in the absence of a spontaneous market process. Antitrust regulation is often a subtle form of industrial planning and is fully subject to the “pretense-of-knowledge” criticism frequently advanced against government planning.

Seventh, the antitrust laws have been enforced arbitrarily, violate traditional notions of due process of law, and always interfere with the rights of property owners or their trustees to make, or not make, voluntary agreements. As Adam Smith observed more than two hundred years ago, a law that interferes with private and voluntary agreements cannot be “consistent with liberty and justice.”¹¹

Finally, the modest progress made to date in antitrust reform has been only administrative. Administrative changes and reforms are helpful and should not be underestimated. But they should not be overestimated, either. The antitrust statutes—even the blatantly anticonsumer Robinson-Patman Act—remain firmly in place, and much of the current enforcement effort is still traditional in nature and, therefore, thoroughly misguided.

Regulatory changes in the air-carrier industry illustrate the wisdom of total repeal as opposed to reform. By the mid-1970s it had become clear that government regulation of this industry, under the Civil Aeronautics Act of 1938, had worked to restrict entry, encourage wasteful practices, and raise costs and prices generally to air-transportation consumers.¹² Theoretical criticism of airline regulation by economists accelerated. The empirical evidence that air-carrier regulation was inefficient and that a free market would work more efficiently became overwhelming. Theory and evidence were then cogently crafted into a solid political case for massive deregulation of the air-carrier industry.

It is important to note that the argument was not that the Civil Aeronautics Board (CAB) should do less in the way of regulation or that it should do something else. The argument was that the CAB itself—the entire regulatory structure—should be abolished and an open-market process be allowed to operate in its place. The necessary and sufficient reform here was the total repeal of the economic regulatory structure, which occurred when Congress terminated the CAB on January 1, 1985.¹³

Air-carrier deregulation would not have worked as well had the existing regulatory structure been maintained. Deregulation often requires a painful reallocation of resources that is sure to hurt special interests, and in the air-carrier industry this process was especially painful. Strong sentiment quickly developed for reregulation, lest America lose its “national transportation system.” But in the absence of any continuing regulatory structure, the general laissez-faire momentum that had been set in motion could not be reversed. As in all such cases, the results of air-carrier deregulation have been enormously beneficial to consumers.

There is an important lesson for critics of traditional antitrust policy here. The administrative changes in antitrust have been transitory. Since the entire regulatory antitrust structure still exists—the laws, the courts, the agencies—the structure has been activated and employed more strictly by different administrators holding different theories. If the case against antitrust regulation is overwhelming, the entire antitrust framework must be abolished.

Theories of Antitrust Policy

It will not be easy to repeal the antitrust system. Antitrust regulation is a firmly entrenched institution in America and has been since 1890. This section explores some of the reasons for the persistent faith in antitrust regulation-despite its record—and speculates on the more subtle meaning of antitrust.

Antitrust as Public Interest

The primary reason for the widespread support for antitrust enforcement is a belief that the laws still serve, however imperfectly, to protect the economy (consumers) from the economic abuses commonly associated with private monopoly and private monopoly power. This perspective can be termed the “public interest” theory of antitrust policy.

The notion of competition is enormously popular in American society. We expect and enjoy competition in sports and in business. In business, competition is said to keep organizations alert and efficient. Business competition gives consumers quality products at low prices, provides buyers with alternative suppliers, forces poorly managed firms out of the market, and limits and restricts so-called economic power.

Monopoly appears antithetical to all of this. Business monopoly is said to deaden initiative and efficiency, restrict production, raise prices, exclude competitors from the market, and misallocate economic resources. It can be economically and even politically dangerous. It is a short step from these impressions to supporting a law that encourages competition and prohibits business monopoly—that is, an antitrust law.

Academic economists have crafted these impressions concerning competition and monopoly into an elaborate theoretical paradigm that serves to legitimize some antitrust regulation. Put briefly, this theory holds that free markets can occasionally fail to work in the best interests of society generally. This market failure can occur whenever private business organizations gain monopoly power, the power to restrict production and raise market price. Such firms can produce less and charge more, and they generally have higher costs than comparably competitive business organizations. A law that prohibits free-market monopolization would appear to promote increased outputs, lower costs, and lower prices for consumers. Antitrust law, therefore, exists to protect the public interest from the power of free-market monopoly.

There are at least two ways to analyze this public-interest perspective on antitrust policy. One way is to challenge the theoretical models of competition and monopoly upon which it is so heavily dependent. If the models are fundamentally deficient, then the scientific case for antitrust is weakened substantially. The other way to challenge the public interest perspective is to study the actual conduct and performance of business organizations that have been convicted under the antitrust laws. If such firms were found not to be restricting production and raising prices—if, indeed, they have been increasing outputs and lowering prices—then the public-interest theory of antitrust regulation would be all but demolished.

Antitrust as Regulation

An entirely different perspective on antitrust policy is to see it as an example of special-interest regulation. Government regulation in America has often been associated with special-interest groups, usually business groups, that have attempted to use legislation to gain and hold economic advantages (or rents) not obtainable in a free market.¹⁴ These advantages are often secured by legal barriers to entry and competition that serve to restrict production and increase prices. Import quotas in the textile industry, for example, have had the effect of protecting domestic textile companies from foreign competition while inflicting massive economic losses on consumers.¹⁵

Antitrust, despite disclaimers, is government regulation. Whether antitrust was originally intended to promote and protect special business interests can never be known with absolute certainty, although there is some evidence this may have been the case.¹⁶ But, as will be demonstrated below, there is adequate evidence that antitrust has often been employed as special-interest legislation. In practice, antitrust has been protective of existing market structures—much like tariff and quota protection—and has served to keep costs and prices higher to final consumers. Antitrust defendants have lost cases because their efficient performance—low prices and successful innovations—has been ruled “exclusionary” of less efficient competitors. In private cases, especially, antitrust has often been employed as a club by plaintiff firms anxious to restrain the price and innovational rivalry emanating from efficient defendant corporations.¹⁷ And since private cases constitute the vast majority of all antitrust litigation, they reveal the fundamental nature of antitrust policy. In short, antitrust, like almost all government regulation, has often served to benefit some at the general expense, a result fully anticipated by much of the public choice literature.¹⁸

If this perspective on antitrust regulation is correct, antitrust law will actually be harder, not easier, to repeal—or even to additionally reform. The social costs of such special-interest legislation such as antitrust are normally spread very thinly over society as a whole; consider for example, the per capita costs of nonsense cases such as the thirteen year government war on IBM or the irrational assault on Microsoft. Yet, the benefits of antitrust regulation are frequently concentrated on very special interests—the antitrust establishment—and those benefits can be substantial. Antitrust attorneys, private plaintiffs, consultants, and the antitrust bureaucracy itself have much to gain from a continuation of antitrust regulations and much to lose from any repeal of or reduction in antitrust enforcement. Consequently, the beneficiary groups have every incentive to strenuously resist reform and repeal and to denounce all antitrust critics in the most strident tones. Ordinary citizens and consumers, on the other hand, have little incentive to rally against the antitrust juggernaut, little incentive even to educate themselves as to the antitrust facts of life. This cost-benefit calculus makes any attempt to repeal the antitrust laws difficult, unless that calculus can be changed.

Antitrust as Industrial Policy

A third perspective on antitrust is to see it as one of America’s oldest industrial policies. Industrial policy is government industrial planning, and much of antitrust policy is a kind of government planning. For example, the Justice Department and the FTC publish detailed merger guidelines that proscribe legally permissible business consolidations. Indeed, they often intervene in mergers, even while permitting them, requiring that firms sell certain assets or companies. As an example, the merger of Texaco and Getty Oil was FTC-approved pending the sale of 600 service stations, certain pipelines, and several refineries; the Gulf-Chevron merger was FTC approved after an agreement was reached to sell 4,000 Gulf stations and a major oil refinery.¹⁹

Further examples of antitrust industrial policy include the FTC’s authority to review the costs and benefits of joint business ventures and to grant or deny approval of interfirm cooperative agreements. The antitrust authorities can move against firms that fix resale prices, charge low (predatory) prices, charge high (monopoly) prices, and charge prices that are the same (collusion). And the FTC can decide to oppose the 1997 merger of Staples and Office Depot based upon some arbitrarily narrow definition of the relevant market (see chapter 6).

This point about industrial planning and policy is emphasized not to quibble over labels but to point out that antitrust, like other government-planning policies, is subject to criticism on the grounds that it always assumes the existence of the information it requires for intelligent decisions concerning social efficiency. As will be argued later, the cost-benefit information that would be required for intelligent choices concerning mergers and divestitures is produced and discovered only through a working out of the open-market process and is knowable only to the particular individuals involved in that process. Antitrust authorities and courts continually presume the existence of such information when they prohibit a merger, deny a joint venture, break up a company, or rule that certain prices are predatory. Yet, if antitrust regulators and courts cannot obtain accurate information concerning future social costs and benefits, no rule of reason in antitrust is really possible. Thus, the case against any antitrust regulation is all the stronger.

The AT&T Case

Those who argue that antitrust is not government-industrial planning will have difficulty explaining the historic decision to break up the American Telephone and Telegraph Company (AT&T) arguably the most significant employment of antitrust regulation in the history of antitrust enforcement. This historic consent decree, among other things, divested the 22 operating telephone companies from AT&T and ended a portion of a 1956 consent decree that had prevented AT&T from competing in nonregulated markets, such as data processing.²⁰ Ending the 1956 consent decree–a legal restriction on market entry and competition–was entirely consistent with permitting a spontaneous market process to exist in telecommunications and data processing. Divesting the operating companies and reorganizing them into seven regional companies was, however, an unprecedented experiment in antitrust industrial planning.

A number of economic arguments were employed to justify the divestiture of the operating telephone companies. The first was that AT&T’s ownership of the operating companies served as a bottleneck to potential long-distance competitors. AT&T’s ownership of the operating companies, so the argument went, placed it in a position to deny any competitor fair access to the bulk of the business and residential telephone market. The second argument was that divestiture would reduce the potential threat of cross-subsidization of revenues from regulated markets to unregulated markets and end the necessity of restricting AT&T from entering unregulated markets. Finally, the divestiture would serve to weaken the grip of AT&T’s Western Electric Company on the telephone equipment market (since the operating companies had ordered the bulk of their equipment from Western), leading to additional innovation and lower equipment prices.

These arguments are not entirely implausible, and the AT&T divestiture may well have led to the results anticipated. But how did its supporters know that the assumed, future benefits of divestiture would exceed its costs? For example, even Robert W. Crandall and Bruce M. Owen, in their excellent discussion of the divestiture issues, concede that the absence of any direct evidence of AT&T’s pre-divestiture vertical-integration joint economies made it “very difficult to prove that the divestiture is necessarily welfare enhancing.”²¹

Indeed, most consumer difficulties in telecommunications did not relate directly to vertical integration and divestiture at all; government regulation, not vertical integration per se, had been the primary obstacle to a truly open-market competitive process in telecommunications.²² The Federal Communications Commission has long restricted entry into long distance telecommunications and had regulated the rates of the monopoly supplier, AT&T. Entry into local telephone markets had been legally restricted by state governments, and phone service and rates had been regulated by public utility authorities; the dominant supplier was, again, AT&T. This regulation was not, of course, accidental. AT&T had a long history prior to divestiture of advocating government regulation and monopoly in telecommunications and of opposing attempts to increase competition by decreasing government regulation.

Most of the alleged difficulties associated with AT&T’s vertical integration—and most of the alleged benefits associated with divestiture—were difficulties that would have been overcome in time by complete deregulation. Cross-subsidization, for instance, becomes a serious issue only in a regulated setting where a firm might choose, say, to finance price-cutting wars in unregulated markets out of revenues or profits earned in regulated markets. Ending the regulation ends the possibility of “unfair” cross-subsidization. In addition, Western Electric’s near capture of the operating-company market for telephone equipment is controversial only because the operating companies can pass along, under regulation, all of the inflated equipment costs to the final consumer of phone services. In an openly competitive market, consistent noncompetitive purchases of materials by vertically integrated companies would normally result in a severe loss of market share for those companies—a strong incentive to change the practice. Again, it was regulation, not vertical integration, that was the ultimate source of the difficulty.

Even the so-called bottleneck and access issues are forever clouded by the fact that, under divestiture, no open-market access value exists for the rival long-distance companies. The current access fees are not market determined but are set under the authority of the FCC. In the absence of true market values, even supporters of divestiture cannot be sure that the existence of rival wire-line suppliers actually improved overall resource efficiency and advanced the elusive public interest.²³

Conclusions

Very little academic or public credence is given to antitrust policy as special-interest regulation or as government-industrial planning. Government regulation and planning have been sharply criticized by economists and, by and large, have been professionally discredited.²⁴ What support now remains for antitrust policy would appear to depend upon the public-interest perspective; that is, the belief that some antitrust regulation is necessary to prevent market failure.

In the following chapters, the public-interest theory of antitrust will be critically examined to determine whether the standard theories of competition and monopoly employed to explain market failure actually make sense and whether the classic antitrust cases contain evidence that free-market monopoly can exist and misallocate resources. If antitrust theory and history are internally consistent, then some antitrust policy may be appropriate. If, however, they are inconsistent, then the public-interest perspective and the policy it supports deserve to be rejected, not simply reformed. Without a scientific public interest justification, there is no rationale for any antitrust regulation in a market economy.

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¹For an excellent criticism of the traditional barriers-to-entry doctrine, see Robert H. Bork, The Antitrust Paradox: A Policy at War with Itself, (New York: Basic Books, 1978), chap. 16. See also Harold Demsetz, “Barriers to Entry,” American Economic Review 72 (March 1982): 47–57.

²Dominick T. Armentano, Antitrust and Monopoly: Anatomy of a Policy Failure, 2nd ed. (Oakland, Calif.: Independent Institute, 1990).

³United States v. International Business Machines Corporation, Docket no. 69, Civ. (DNE) Southern District of New York (1969).

⁴Many companies, including Greyhound, Telex, Cal Comp., and Memorex, sued IBM under the antitrust laws. Most of these cases were resolved in IBM’s favor. See Franklin M. Fisher, James W. McKie, and Richard B. Mancke, IBM and the Data Processing Industry: An Economic History (New York: Praeger Publishers, 1983), pp. 448–49.

⁵Franklin M. Fisher, John J. McGowan, and John E. Greenwood, Folded, Spindled, and Mutilated: Economic Analyses and U.S. v. IBM (Cambridge, Mass.: MIT Press, 1983).

⁶Ibid., p. 111.

⁷Wall Street Journal, January 11, 1982, p. 3.

⁸Harold Demsetz, The Market Concentration Doctrine, American Enterprise Institute-Hoover Institution Policy Studies (August 1973); idem, “Industry Structure, Market Rivalry, and Public Policy,” Journal of Law and Economics 16 (April 1973): 1–9.

⁹See, for instance, Joseph S. Bain, “Relation of profit Rates to Industry Concentration: American Manufacturing, 1936–1940,” Quarterly Journal of Economics 65 (August 1951): 293; and H. Michael Mann, “Seller Concentration, Barriers to Entry, and Rates of Return in Thirty Industries: 1950–1960,” Review of Economics and Statistics 48 (August 1966): 296–307.

¹⁰Yale Brozen, “Concentration and Profits: Does Concentration Matter?” Antitrust Bulletin 19 (1974): 381–99; John R. Carter, “Collusion, Efficiency, and Antitrust,” Journal of Law and Economics 21, no. 2 (October 1978): 434–44. An excellent discussion of the concentration and profit controversy appears in Harvey Goldschmid, H. Michael Mann, and J. Fred Weston, eds., Industrial Concentration: The New Learning (Boston: Little, Brown, 1974).

¹¹Adam Smith, An Inquiry Into The Nature and Causes of The Wealth of Nations (New York: Modern Library, [1776] 1937), p. 128.

¹²George Douglas and James Miller, Economic Regulation of Domestic Air Transport (Washington, D.C: Brookings Institution, 1974). For an account of the results of airline deregulation, see John E. Robson, “Airline Deregulation: Twenty Years of Success and Counting,” Regulation 21 (1998): 17–22.

¹³Some of the CAB’s regulatory powers, including the authority to regulate airline computer-reservations systems, were shifted to the Department of Transportation (DOT). See Regulation 9 (January/February 1985): 8. For the antitrust implications of DOT regulation of computer-reservations systems, see Antitrust and Trade Regulation Reporter 48, no. 1207 (March 21, 1985): 505.

¹⁴George J. Stigler, “The Theory of Economic Regulation,” Bell Journal of Economics and Management Science 2 (Spring 1971): 3–21; Sam Peltzman, “Toward a More General Theory of Regulation,” Journal of Law and Economics 19 (August 1976): 211–40. For a review of the rent-seeking literature, see Robert D. Tollison, “Rent Seeking: A Survey,” Kyklos 35 (1982): 575–602.

¹⁵See “Economic Effects of Significant U.S. Import Restraints,” Publication 2935 (Washington, D.C: International Trade Commission, December 1995). The economic losses were estimated at roughly $10 billion annually.

¹⁶Thomas J. DiLorenzo has shown that outputs in the “trust” industries—far from being restricted—expanded rapidly in the decade prior to the Sherman Act of 1890. He has also argued that Sen. John Sherman’s motives in sponsoring the act may have been ambiguous. See Thomas J. DiLorenzo, “The Origins of Antitrust,” International Review of Law and Economics 5 (1985): 73–90. See also Thomas W. Hazlett, “The Legislative History of the Sherman Act Reexamined,” Economic Inquiry 30 (1992): 263–76.

¹⁷William J. Baumol and Janusz A. Ordover, “Use of Antitrust to Subvert Competition,” Journal of Law and Economics 28 (May 1985): 247–65.

¹⁸See, for instance, Robert D. Tollison, “Public Choice and Antitrust,” Cato Journal 4, no. 3 (Winter 1985): 905–16. See also William F. Shughart II, Antitrust Policy and Interest Group Politics (New York: Quorum Books, 1990).

¹⁹Oil and Gas Journal, January 23, 1984, p. 48; Oil and Gas Journal, February 6, 1984, p. 84; Oil and Gas Journal, July 16, 1984, p. 43; Wall Street Journal, April 24, 1984, p. 4. The Hart-Scott-Rodino Antitrust Improvement Act of 1976 requires prenotification of certain size mergers.

²⁰United States v. AT&T, 524 F. Supp. 1336 (1981); United States v. AT&T, 552 F. Supp. 131 (1982).

²¹Robert W. Crandall and Bruce M. Owen, “The Marketplace: Economic Implications of Divestiture,” in Disconnecting Bell: The Impact of the AT&T Divestiture, Harry M. Shooshan ed. (New York: Pergamon Press, 1984), p. 57.

²²Roger G. Noll and Bruce M. Owen, “The Anticompetitive Uses of Regulation: United States v. AT&T,” in John E. Kwoka, Jr. and Lawrence J. White, eds., The Antitrust Revolution (Boston: Scott, Foresman, 1990) pp. 290–337.

²³There was early evidence that overall “consumer interests” were not advanced by the divestiture. See Paul W. MacAvoy and Kenneth Robinson, “Losing by Judicial Policymaking: The First Year of the AT&T Divestiture,” Yale Journal on Regulation 2 (1985): 225–62.

²⁴See, for example, Robert W. Poole, Jr., ed., Instead of Regulation (Lexington, Mass.: Lexington Books, 1983). An excellent critical analysis of the entire government-planning paradigm by many authors can be found in Cato Journal 4, no. 2 (Fall 1984). For a definitive book-length criticism of government planning see Don Lavoie, National Economic Planning: What is Left? (Cambridge, Mass.: Ballinger, 1985).