The rise of big business hotly followed the Civil War.  Railroads, coal mines, steel mills, oil, telegraphs, and banks all grew in size and wealth as America industrialized.  Big companies integrated horizontally and vertically.  They formed ‘trusts” to cut up the national market and set prices without reference to market forces.  Companies played a rough game with each other, with their workers, and with their customers.[1]  The aggrieved fought back in a variety of ways, none of them very effective.  State regulation of railroads, national anti-trust legislation, and guns and dynamite made headlines without braking the advance of big business. 

            Louis Brandeis, lawyer and then Justice of the Supreme Court, advanced a compelling theory of anti-bigness.[2]  Brandies argued that there could be neither competition nor bargaining in sectors where one actor dominated the market for goods, services, or employment.  Moreover, a dominant company—well the handful of men who owned or controlled it–could impose its will in other areas thanks to the wealth it accumulated.[3]  His views came to dominate legal and government approaches to the growth of big business from the New Deal to the Eighties. 

            If a criticism might be offered, it is that the approach is subjective, moralistic, and essentially aesthetic.  It didn’t try to measure whether customers were economically better or worse off from any particular size of or market domination by a company.  It believed that competition should not be carried to its logical conclusion, victory for one competitor.  It could cite many instances of bad behavior by companies without demonstrating the representatives of those anecdotes.  Fundamentally, it reflected a view that, when pushed too far, inequalities of wealth and power are unseemly. 

            This view finally sparked an effective response in the Reagan Era.  In 1978, Yale law professor Robert Bork published The Antitrust Paradox.  The “paradox” identified by Bork lay in the raising of consumer prices and the limiting of competition through anti-trust laws that effectively protected established competitors.  Bork argued that “consumer welfare” should be the standard for deciding whether some merger should be allowed.  The price and variety of goods offered to the consumer could be measured objectively.  Bork’s view gained dominance in the courts. 

            If a criticism of this approach might be offered, it is that it views humans too narrowly.  How much stuff people can buy and at what price isn’t the only measure of human happiness or welfare.  For example, trust in the larger social, political, and economic systems to give people what they believe to be a fair shake in life also is essential.  That confidence often is based in emotion and intuition, rather than cold logic.  It is subject to manipulation.[4]  It’s real.  It’s vital. 

            Now a new phase in anti-trust has opened.  The current approach has been labeled “neo-Brandesian.”  Its face is Lina Khan, the new chair of the Federal Trade Commission. 

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[1] See Glenn Porter, The Rise of Big Business, 1860-1920 (1992) for a concise summary of the scholarly literature.  See Raymond Chandler, The Long Goodbye (1953) for a mid-century popular evaluation: “There ain’t no clean way to make a hundred million bucks…. Somewhere along the line guys got pushed to the wall, nice little businesses got the ground cut out from under them… Decent people lost their jobs…. Big money is big power and big power gets used wrong. It’s the system.” 

[2] Greg Ip, “Latest Antitrust Approach Has Its Own Risks,” WSJ, 8 July 2021. 

[3] It’s probably hard to regulate anything effectively when one party can hire all the best lawyers. 

[4] American media is the last great industry largely free from government regulation.  Long may it so remain.