First initially concludes that it would be unwise to permit otherwise
anticompetitive mergers in such industries, but that a case can be made for
allowing collaborative "cartel" ventures in such industries, subject to close
government monitoring. Applying his analysis to the problems faced by the
semiconductor industry in the 1980s, First then argues that some form of
monitored cartel in that industry would have been preferable to the results
that "competition" in this market produced and would clearly have been
superior to the trade policy that the government chose and that produced
few benefits for the United States.
In a companion essay, Professor Willard F. Mueller of the University
of Wisconsin-Madison Economics Department links the predicament of
distressed industries with past failures of antitrust enforcement. He
challenges the claim that businesses in distressed industries need relief from
antitrust to compete effectively in world markets and argues that the
converse has been true: Too much leniency toward mergers in the past
produced the lethargy that prevented U.S. firms from meeting the foreign
These proposals are described in some detail in
Correia, Congress and Antitrust
Policy after the Reagan Adminitration, chapter 23 in this volume.
Congress took a small step in that direction with the passage of the Exon-Florio
Amendment in the Omnibus Trade and Competitiveness Act of 1988, 102 Stat. 1425,
giving the president authority to review acquisitions of U.S. corporations 'by or with
foreign persons" to determine whether such acquisitions "threaten to impair the national
security." For legislative history, see 1988 U.S. Code Cong. & Admin. News 1547. Some
have urged that this statute be used to block the takeover of important high-technology
Questia, a part of Gale, Cengage Learning. www.questia.com
Book title: Revitalizing Antitrust in Its Second Century:Essays on Legal, Economic, and Political Policy.
Contributors: Harry First - Editor, Eleanor M. Fox - Editor, Robert Pitofsky - Editor.
Publisher: Quorum Books.
Place of publication: New York.
Publication year: 1991.
Page number: 380.
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