Economic Law and Economic Growth: Antitrust, Regulation, and the American Growth System

By George E. Garvey; Gerald J. Garvey | Go to book overview

that Chief Justice Hughes had evinced in the Appalachian Coals decision. The pricing mechanism, Justice Douglas explained, is too vital a part of a properly functioning free market to permit any private interference. Indeed, he asserted, the pricing mechanism is the "central nervous system of the economy."81 Pricefixing agreements could never be tolerated.

In the Court's view as expounded by Justice Douglas, neither the industry's distressed circumstances, the parties' good motives, nor even beneficial actual effects could justify price fixing. It made no difference whether prices were raised, lowered, or merely stabilized. The success of the price-fixing venture was not relevant to the issue of legality--even those who lacked any power actually to affect prices would violate the Sherman Act by agreeing to act as if they could do so.82

Because--above all else--an unrestrained pricing mechanism had to be preserved as the governor of the marketplace, the oil producers' price-fixing agreement was illegal per se. The rule of Socony-Vacuum has, until recently, been applied unswervingly.83

Socony-Vacuum began a period committed to extensive judicial development of per se rules--rules intended to enhance certainty and free courts from the difficult task of complex economic analysis. A per se rule ideally results in swift, unquestioned condemnation--the conduct is illegal regardless of the actor's purpose or the act's actual effect. Conduct characterized as per se illegal is by definition so undesirable that the benefits of certainty and judicial economy outweigh any lost efficiencies.

The announcement of the per se rules of the early 1940s set the stage for a new era in American economic law. The political-economic context of that era, together with its dominant policy themes and their animating theories, furnish the main subjects of the next chapter.


NOTES
1.
Albert Rees, Real Wages in Manufacturing, 1890-1914 (Princeton, N.J.: Princeton University Press, 1961), 116ff and chap. 5. And see at p. 125, where Rees analyzes his finding that during the period, output per man-hour worked--i.e., worker productivity--actually increased at a higher rate than did real hourly wages in manufacturing.
2.
On a 1958 baseyear of 100.
3.
See Bureau of the Census, U.S. Department of Commerce, Historical Statistics of the United States, Colonial Times to 1970, 2 vols. ( Washington: Government Printing Office, 1975), 1:224, 165; see also Louis M. Hacker, The World of Andrew Carnegie, 1865-1901 ( Philadelphia: Lippincott, 1967), 157-60.
4.
See Jonathan R. Hughes, American Economic History, 2d ed. (Glenview, Ill.: Scott Foresman, 1987), 320.
5.
Robert Cochrane and William Miller, The Age of Enterprise ( New York: Harper's, 1942), 71ff.
6.
Anthony Wallace, Rockdale ( New York: Norton, 1972), 101, 163-68,220-22.

-52-

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Economic Law and Economic Growth: Antitrust, Regulation, and the American Growth System
Table of contents

Table of contents

  • Title Page iii
  • Contents vii
  • Figures and Tables ix
  • Preface xi
  • Acknowledgments xv
  • Introduction ANTITRUST, REGULATION, AND THE AMERICAN GROWTH SYSTEM 1
  • Notes 7
  • 1- Antebellum America: Emergence of the Growth System 13
  • Notes 26
  • 2- The Context and Functions of Modern Economic Law 33
  • Notes 52
  • 3- Neopopulism and the Image of the Atomized Market 59
  • Notes 73
  • 4- Neoclassical Price Theory and Rate Regulation 81
  • Notes 99
  • 5- The Chicago School, Antitrust, and Consumer Surplus 103
  • Notes 116
  • 6- Antitrust, Regulation, and the Field of Policy Choice 121
  • Notes 137
  • Epilogue ECONOMIC LAW, INDUSTRIAL POLICY, AND ECONOMIC GROWTH 145
  • Notes 152
  • SELECTED BIBLIOGRAPHY 157
  • Index 165
  • About the Authors 169
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