There is a live debate going on over whether antitrust should take a broader view of the economics of market concentration. When antitrust reformers like Lina Khan (Chair of the Federal Trade Commission) argue for a return to “Brandeisian” approaches to antitrust, they offer arguments sounding in the economics of dynamic competition (in opposition to the currently dominant approach to antitrust: the consumer welfare standard frequently attributed to Robert Bork). But their real argument is not about the economics of efficiency; it’s about the relative roles of government and business in the structuring of competition.
This tension has been at the root of trade regulation since the inception of nationalized trade regulation during the British mercantile order. Couching political disputes such as these in the rhetoric of technical expertise is not new; it was a major part of the movement (James Landis’s “administrative process”) underlying the creation of the larger administrative state of which Federal Trade Commission is only a part. But the FTC has never fit comfortably in the technocratic approach to administrative regulation, and recent proposals by antitrust regulators only highlight why.
When understood in political rather than technical terms, the current battle over the politics of both innovation and competition highlights the inherently political role of politically insulated agencies like the FTC. Although ostensibly appealing to the technical application of economic concepts like the choice between static and dynamic competition, the FTC’s arguments for increased deference to determine what types of conduct constitute “unfair methods of competition” have implications that go far beyond the ambit of economics. Claims by antitrust enforcers that they should have stronger antitrust law to enforce (and more power to interpret antitrust law) should be viewed not through the lens of economics but instead through the lens of the political and constitutional order. That much was clear in 1624, when the Statute of Monopolies was adopted, and 1914, when the Federal Trade Commission Act was; it should be equally so today.
Political claims are hardly new to antitrust, although relative stability in antitrust scholarship since the late 1970s has misled many to think those political questions had been resolved. Antitrust has been dominated over the last forty-five years by seemingly technical, neoclassical microeconomics, but the privileged placement of such concerns has been the product of a separate, political commitment: the consumer welfare standard. The consumer welfare standard is best seen not as a statement about economics but about antitrust’s role in the political, regulatory order. The current attack on the consumer welfare standard is clearly political; its defense needs to be political as well.