Neither Populist Nor Neoclassical: The Classical Roots of the Competition Principle in American Antitrust

Posted by Social Science Research Network

Neither Populist Nor Neoclassical: The Classical Roots of the Competition Principle in American Antitrust

By Nicola Giocoli

Much of the current critical views on American antitrust law focus on a supposed misinterpretation by modern, welfare-driven antitrust enforcers of the true meaning of the competition principle. The paper contributes to the debate by reconstructing the principle’s historical origin. While it did not feature in the Sherman Act, the competition principle was introduced by the Supreme Court during the formative era of antitrust law. Between 1897 and 1911 the Court proposed alternative versions of the principle; the one which eventually prevailed was neither populist nor neoclassical, as it was based on classical political economy and, in particular, on freedom of contract and “natural” values. Yet, this historical circumstance is not necessarily bad news for recent proposals to reform antitrust law.

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