Antitrust and regulation as they exist today are the results of a century and more of legal development, tracing back to the late nineteenth-century populists' and progressives' efforts to deal with the "problem of the trusts" (so called after a type of combination that John D. Rockefeller's lawyers devised to control oil marketing;1 the term trusts became a code word for most other forms of industrial concentration as well).
The populist-progressive era stretched roughly from 1877, when the Supreme Court upheld state legislation regulating businesses that were "affected with a public interest,"2 until 1914, when Congress passed the Clayton Act outlawing practices that tended substantially to lessen competition3 and the Federal Trade Commission Act setting up a federal watchdog agency.4
The mostly rural populists5 and the urban progressives6 often disagreed with one another and, for that matter, among themselves. But spokesmen for the two movements could unite in the view that the corporate combinations of the day threatened the public interest. They represented excessive market power, abusive of consumers and subversive of competition.
Broadly speaking, antitrust developed to maintain competitive pricing in industries thought to be capable of sustaining competition. By contrast, rate regulation came to predominate in markets where competitive conditions were considered unsustainable, usually because of peculiarities in the technologies of the relevant industries. In such markets, rate regulators were to estimate the prices that competition would bring about if it existed, and then set rates at approximately that level. In other words, antitrust aimed to guarantee competition; rate regulation, to simulate it.
The good guys-bad guys view of competitors and monopolists implied the