The Political Economy of the Sherman Act: The First One Hundred Years

The Political Economy of the Sherman Act: The First One Hundred Years

The Political Economy of the Sherman Act: The First One Hundred Years

The Political Economy of the Sherman Act: The First One Hundred Years

Synopsis

This book examines the legislative history and the political economy of the Sherman Antitrust Act--the main federal statute that regulates economic activity in the United States. Tracing the evolution of the antitrust movement in the United States since 1890, this collection of essays examines the role of government in regulating markets, and the balance it and its critics seek between the goal of limited government and the protection of free, open and competitive markets, With markets today being more international in nature and the world economy being globalized, Americans need to rethink how laws have defined markets and the implications for international transactions. Given the recent changes in Europe, this book has a significant contribution to make to the intellectual understanding of antitrust laws impact on American business here and abroad, on the European Economic Community (EEC) as it creates a single market by 1992, and on Eastern Europe as it moves to a market economy.

Excerpt

On the occasion of the one hundredth anniversary of the Sherman Antitrust Act, it seems appropriate to take stock and review the history of the act. This book is an examination of the legislative intent of the Act and the political economy that informed the legislation. It also reviews and analyzes the contemporary debates concerning the goals and values that underlie the Sherman Act.

The first principle of antitrust is that our economic system should operate through market forces and that American markets should be competitive. As a body of law, antitrust attempts to regulate the relationship between buyers and sellers in individual markets when there is a breakdown of the natural market forces. When the market deviates from this competitive ideal, antitrust intervention is an accepted norm. But care must be exercised in the case of intervention so that the costs of government enforcement do not exceed the costs of the market imperfection. The study of antitrust, then, is also the study of the role of government in regulating markets, and the balance that must be struck between the idea of limited government and the protection of free, open, and competitive markets.

To say that antitrust is designed to maintain and promote competition is only the starting point. The Sherman Act did not explicitly define the term "competition"; the debate on that issue continues today. That issue, to be sure, is central to the entirety of antitrust law and policy. We know that antitrust has a procompetitive foundation, but the history of antitrust demonstrates that . . .

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