THE CHICAGO SCHOOL, ANTITRUST, AND CONSUMER SURPLUS
The picture of the economy proposed by the marginalists and the contestability theorists evoked the neopopulist imagery of firms in ferocious competition-- entrants waiting to pounce on price-gouging incumbents, sellers and buyers being driven toward the marginal rate so that price would equal opportunity cost across society as a whole. But whereas the neopopulists had championed small firms, it was clear that the more cold-eyed New Jerseyites and the disciples of Kahn looked toward deregulation in the context of a Big Business economy. If the Big Business imagery were to be sustained, the neopopulist principles of antitrust would have to undergo some severe redefinition. The redefinition was the contribution of the Chicago School.
Under the intellectual leadership of Robert Bork and Richard Posner,1 the Chicagoans built a whole new wing in the house of antitrust. The members of this school went back to the master himself for their foundational concept of consumer surplus--to the Victorian economist Alfred Marshall, who probably more than any other individual deserved the title Father of Neoclassical Theory.2
For the Chicagoans, economic efficiency seems to have been a more important goal than competition itself: efficiency because neoclassical theory showed that it maximized consumer welfare (the highest value), with competition as a subgoal because it contributed to efficiency--or rather, to a particular kind of efficiency, called "static efficiency."