The latest evidence that the right is troubled these days comes from The American Conservative. There Daniel Kishi attacked Robert Bork for redirecting antitrust law to the detriment of the American economy. The reformation of competition law in America, which has influenced law around the world, is in reality one of the greatest achievements of the forces for liberty. It replaced various interpretations that courts in the eras of the New Deal and the Great Society used to maximize their own discretion at the expense of economic efficiency in favor of one that has served the cause of consumers and innovation. A mark of the folly of Kishi’s critique is that he even praises Brown Shoe, an enduring marker of judicial activism and incoherence that is much of a piece with the rest of Earl Warren’s jurisprudence.
But begin with the one thing that Kishi gets right. As I have discussed elsewhere, antitrust law now resembles the recommendations that Bork laid out in his famous book, the Antitrust Paradox. Disagreement on particular antitrust cases, of course, continues, but the disagreements take place in the legal landscape that he created. I would analogize Judge Bork here to the most successful kind of statesman ― one who, like Margaret Thatcher ― transforms even the opposition by creating new terms of debate.
Kishi’s other arguments are wrong in every respect. Bork did not pervert the law by making economic efficiency and consumer welfare the lodestar of antitrust. The Sherman Act condemns only “restraints of trade” and “monopolization.” In its early interpretations of the Act, the Supreme Court correctly required a restraint of trade or monopolization to be based on a practice that was “not honestly industrial.” This interpretation reflected the common law origins of these terms. Mere size or innovative practices that put pressure on competitors was not condemned. Otherwise antitrust law itself would become a barrier to innovation in the economy.
Nor did the Clayton Act change the basic orientation of the antitrust laws. To be sure, some supporters of the Act spoke in the expectation that it would help small business given what they understood to be the current risks of monopolization. But they never disputed that the antitrust was to promote the welfare of consumers.
The most extraordinary aspect of Kishi’s attack on Bork is his defense of Brown Shoe. Little in the history of the Supreme Court has been worse than Chief Justice Warren’s opinion in that case: it is the jurisprudential equivalent of two plus two equals five. The case concerned a government challenge to a proposed merger between two manufacturers and retailers of shoes. The shoe market was wholly unconcentrated and the merger would have created a company with only about a five percent market share. Warren condemned such a puny merger by claiming without evidence that this small merger was going to leading to concentration as other firms merged. This kind of analysis gives the courts discretion to shape industries on the basis of unsupported suppositions about an unknowable future.
And because Warren lacked any principled framework for economic analysis, the Court managed to contradict itself within the space of a single paragraph, a record even for Warren:
The retail outlets of integrated companies, by eliminating wholesalers and by increasing the volume of purchases from the manufacturing division of the enterprise, can market their own brands at prices below those of competing independent retailers. Of course, some of the results of large integrated or chain operations are beneficial to consumers. Their expansion is not rendered unlawful by the mere fact that small independent stores may be adversely affected. It is competition, not competitors, which the Act protects. But we cannot fail to recognize Congress’ desire to promote competition through the protection of viable, small, locally owned business. Congress appreciated that occasional higher costs and prices might result from the maintenance of fragmented industries and markets. It resolved these competing considerations in favor of decentralization. We must give effect to that decision.
The Court thus states that the Act protects competition, not competitors, but then asserts in the next sentence that competitors must be protected. It is left to the Court’s discretion to make trade-offs between these two incompatible goals. It is hard to understand why any conservative would join Warren in maximizing judicial discretion at the expense of economic coherence.