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72 Geo. L. J. 1511 (1983-1984)
The Decline of Antitrust and the Delusions of Models: The Faustian Pact of Law and Economics

handle is hein.journals/glj72 and id is 1519 raw text is: The Decline of Antitrust and the Delusions of Models: The Faustian Pact of Law and Economics FREDERICK M. ROWE* This article examines the economic premises of antitrust law in histori- calperspective, beginning with the Sherman Act's origins in 1890 as a pragmatic accommodation of enterprise and power. The article then explains the post-New Deal era's ambitious campaign against economic concentration, the rise of the oligopoly model as the law's guiding norm, and antitrust's decline as the model ceased tofit new enterprise condi- tions of technological change, business divers~fcation, and global rival- ries. Thereafter, the article explores the origins, uses, and limitations of alternative antitrust-economic models-Oligopoy, Efficiency, and Ex- perience Curve-and shows how each yieldsfalse norms after its under- lying actualities have changed Finaly, the discussion highlights the delusive certitude of economic models, and criticizes their misuse as le- gal norms that polarize antitrust law and thwart the discourse toward wise policies serving the national interest in a changing world TABLE OF CONTENTS Introduction .......................................................... 1512 I. The Crusade Against Economic Concentration: The Shifting Balance of Enterprise and Power ................................ 1513 A. The Origins of Antitrust: Pragmatism, Pluralism, and Distrust of Power ........................................... 1513 B. The Rebirth of Antitrust: The New Deal Confrontation with Big Business ................................................ 1520 C. Preventing Economic Concentration: Paradoxes of Anti- M erger Policy ............................................... 1524 D. Curing Economic Concentration: Futilities of Enterprise Fragmentation .............................................. 1535 II. The Delusions of Antitrust-Economic Models: Perishable Packaged Visions ................................................ 1540 A. The Oligopoly Model: The Idol of the Square .............. 1541 B. The Efficiency Model: The Idol of the Curve ............... 1547 C. The Experience Curve Model: The Idol of the Niche ....... 1553 III. Economic Models and Antitrust Norms: Dilemmas of Order and Change .......................................................... 1559 Senior Lecturer, Yale School of Organization and Management; Past Chairman, American Bar Association, Section of Antitrust Law; and Visiting Lecturer, Yale Law School. Keen critiques of ear- lier drafts by Betty Bock, Thomas J. Campbell, Eleanor M. Fox, Ernest Gellhorn, and Robert Pitofsky are gratefully acknowledged. Copyright © F.M. Rowe, 1984. 1511

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