Antitrust in the United States today is caught between its pursuit of technical rules designed to define and implement defensible economic goals, and increasing calls for a new antitrust “movement.” The goals of this movement have been variously defined as combating industrial concentration, limiting the economic or political power of large firms, correcting the maldistribution of wealth, control of high profits, increasing wages, or protection of small business. High output and low consumer prices are typically unmentioned.
In the 1960s the great policy historian Richard Hofstadter lamented the passing of the antitrust “movement” as one of the “faded passions of American reform.” In its early history, he observed, antitrust had a powerful movement quality but very little success in the courts. Later, it ceased to be a movement just as it was attaining litigation success. As a movement, antitrust often succeeds at capturing political attention, but it fails at making effective – or even coherent – policy. The coherence problem shows up in goals that are both unmeasurable and fundamentally inconsistent, but with their contradictions rarely exposed. Among the most problematic contradictions is the one between small business protection and consumer welfare. Consumers benefit from low prices, high output and high quality and variety of products and services. But when a firm is able to offer these things it invariably injures rivals, typically smaller firms or those dedicated to older technologies. Although movement antitrust rhetoric is often opaque about specifics, its general effect is invariably to encourage higher prices or reduced output or innovation, mainly for the protection of small business or firms dedicated to older technologies. Indeed, some spokespersons for movement antitrust write as if low prices are the evil that antitrust law should be combating.
This piece sets out to do three things. First it describes so-called “movement” antitrust, focusing on recent writings disparaging consumer welfare in favor of alternatives that seek to protect small business welfare, redistribute wealth, or pursue other goals. Then it describes the fundamental contours of technical antitrust, whose stated goal is the protection of low prices and high output, and explains why this approach is much more consistent with concerns about economic rationality, due process, administrability, and federalism. Finally, it examines several areas where technical antitrust rules could be improved, focusing mainly on merger policy and one particularly problematic area, which is antitrust’s historical failure to deal adequately with monopsony power in labor markets.'Equity: Notes on the American Reception' by Samuel L. Bray in Philosophical Foundations of the Law of Equity (Oxford University Press, Forthcoming) considers
the reception of equity in the law of the United States, and in particular the reception of two ideas: first, a small-scale moral reading of the law, analysed under the rubric of “nice adjustment,” and second, a willingness of courts to give direct orders to private parties and government officials, analysed under the rubric of “judicial command.” These ideas have had very different careers in the United States. Nice adjustment has faded, while judicial command has been embraced with enthusiasm. This article asks why.Bray comments
The Earl of Oxford’s Case famously presents equity as a solution to the problem of exceptional cases. In an exceptional case, equity offers a moral reading of the law. In this moral reading—this appeal to Conscience — the chancellor could make a ‘nice adjustment’ to keep clever people from circumventing the law, from exploiting its inevitable gaps and ambiguities. Below the surface, The Earl of Oxford’s Case also shows another distinguishing trait of equity. Equity was willing to tell people what to do. The intricate history of this seventeenth-century case does not need to be recounted here, but it should be noted that the defendants in equity, the master and bursar of Magdalen College Cambridge, spent five weeks imprisoned in the Fleet for their refusal to submit to Chancery’s jurisdiction.
In the centuries since The Earl of Oxford’s Case, equity has been received in the United States. That reception is the topic of this article. ‘Reception’ is used not only in the technical sense of adoption of a body of law as binding, but also in a looser sense: how has equity made its way in the United States? Particular attention is given to two ideas from equity: first, a small-scale moral reading of the law, analysed under the rubric of ‘nice adjustment’, and second, a willingness of courts to give direct orders to private parties and government officials, analysed under the rubric of ‘judicial command’. These two ideas have common premises and are subject to common criticisms. But their reception in the United States has been strikingly different. Nice adjustment has faded, while judicial command has been embraced with enthusiasm.He concludes
What lies ahead for equity in the United States is not easy to predict. As the American baseball player Yogi Berra said, ‘It’s tough to make predictions, especially about the future.’ Nor is it easy to say what lessons should be drawn from the American experience with equity. One way to join prediction of the future with assessment of the past is to ask which of our existing beliefs about law should be revised in light of the American experience of equity. Here are several possibilities:
1. Professional knowledge matters more than we thought, and what the law says matters less than we thought. There have been huge changes in the American practice with respect to these two ideas from equity, even though there has been essentially no change in relevant legal authority.
2. Professional knowledge is more fragile than we thought, and more dependent than we thought on what is taught by the law schools and other institutions that transmit legal knowledge.
3. There was once a vigorous argument among legal writers about whether equity needed to be special in order to be useful. On one side, some argued that getting rid of equity’s sense of separateness would bring its demise. On the other side, some said that was ridiculous: equity could offer its gifts to the legal system without being considered something special or distinctive. Now we know who was right. Step by step, the decline of equity’s distinctiveness has brought a corresponding decline in the knowledge and appreciation of equity.
Relatedly, there may be an implication regarding the efforts to pare equity down to its unique essentials.57 If equity is to make a differentiated contribution to the law, it might need a certain scale, along with ample markers of distinctiveness. Perhaps it is only a larger, woolier equity that can fend off the predators.
What lies ahead, and what lessons should be learned from what lies behind, depend on the knowledge of equity among future generations of American lawyers. If that knowledge continues to decay, then by the end of this century in the United States a book called Philosophical Foundations of the Law of Equity may seem as quaint as Philosophical Foundations of the Law of Mortmain. But if the knowledge of equity grows, that knowledge can be used: all of the legal authorities that make equity relevant are still there, waiting to be picked up by an enterprising lawyer.