This list of conservation devices is not exhaustive. The "antitrust injury" rule, the doctrine of Illinois Brick, the courts' refusal to award contribution among antitrust offenders, these and more cut down on litigation and error costs. Let me mention just one more that is used in other industrial nations (and in many bodies of our law, such as securities regulation) but rare in antitrust law in the United States: administrative safe harbors.
Information becomes a larger fraction of the cost of production as time passes. The next generations of aircraft, computers, HDTV, and so on, will be made not of steel or silicon or sweat and tears. They will be "assembled" principally from information--from knowledge. No firm has the right incentive to acquire knowledge, because no firm can appropriate all of the benefits of what it knows. To make matters worse, attempts to appropriate the benefits lead to inefficiently little use of products based on the latest knowledge, for the marginal cost of using what is known is zero. Firms can overcome some of the problems by cooperating, sharing both costs and benefits. But as soon as they start cooperating, they expose themselves to treble damages.
Professors Jorde and Teece emphasize in their contribution to this symposium that antitrust law must find a way to accommodate doctrine developed in a world in which production meant riveting steel plates together to the increasing need for cooperation in information-intensive markets (see Chapter 3). This accommodation inevitably will come through safe harbors, similar to those that now apply to research and development joint ventures or to newspaper joint operating agreements. Administrators can formulate rules of nationwide application; a court may speak only for itself.
Antitrust is today a body of common law, always in evolution, subject to different interpretation in thirteen federal circuits and the courts of fifty states. A single practice may be challenged in a dozen forums, by private plaintiffs and state attorneys general, each convinced that litigation advances the nation's welfare. No matter how well-intentioned the plaintiffs, no matter how astute the judges, the process of common law litigation is one of uncertainty. Until the last case is over, no one knows whether the practice can survive--indeed, no one knows whether its practitioners can survive (given the prospect of stupendous damages). Common law antitrust litigation is high-risk litigation, high-delay litigation. By the time the other shoe drops, the moment for this generation of products is past. Some other nation, with a legal system able to give quick and binding answers to tough questions, will take the baton. Antitrust must recognize this and adjust, or a system designed to promote consumers' welfare will inflict the wound of Amfortas.
This paper was completed in April 1989 and was revised in only minor ways thereafter, principally by adding a few citations to recent decisions.