Ignorance and Antithrust
FRANK H. EASTERBROOK
The hallmark of the Chicago approach to antitrust is skepticism. Doubt that we know the optimal organization of industries and markets. Doubt that government could use that knowledge, if it existed, to improve things, given the ubiquitous private adjustments that so often defeat public plans, so that by the time knowledge had been put to use the world has moved on. 1 Efforts to improve markets through law aim at a moving target, with a paradox: if an economic institution survives long enough to be studied by scholars and stamped out by law, it probably should be left alone, and if an economic institution ought to be stamped out, it is apt to vanish by the time the enforcers get there. No wonder Chicago does not have a stirring program for aggressive antitrust enforcement. 2 To have such a program is to deny one or more of the premises underlying the analysis.
If the program implied by Chicago's analysis--clobber cartels and mergers to monopoly but treat with great skepticism proposals to do anything else--has not converted all judges and political actors as fully as it has convinced the Antitrust Division, Chicago's analytical lens is at least in wide use. Everyone at this conference believes that antitrust analysis means economic analysis. So does almost every judge. All have accepted the proposition that antitrust policy divorced from economics would be a calamity, and an antitrust policy conjoined with some inconsistent social policy would be incoherent and ineffectual. 3 To keep prices down and efficiency up, in the interests of consumers and the economy as a whole, courts and other enforcers must think like economists.
Which is easier said than done. Economic method entails more than recognizing that demand schedules slope downward and that people make decisions on the margin. To learn anything valuable about an industry or market the economist must collect facts, formulate hypotheses about the effects that are likely if the conduct is monopolistic, use data to search for these effects, and