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74 Iowa L. Rev. 1175 (1988-1989)
How to Assess the Impact of Antitrust on the American Economy: Examining History or Theorizing

handle is hein.journals/ilr74 and id is 1189 raw text is: How to Assess the Impact of Antitrust
on the American Economy: Examining
History or Theorizing?
Peter C. Carstensen*
INTRODUCTION
Those nattering nabobs of negativism, Judges Easterbrook and
Posner, and former Judge Bork, advance the broad claim that traditional
antitrust law has imposed serious efficiency costs on the American
economy.' Those charged with enforcing the antitrust law substantially
have accepted this view.2 The courts, too, increasingly have embraced the
conclusion that strong antitrust decisions impose serious costs on the
American economy.3
*Professor of Law, University of Wisconsin. B.A. 1964, University of Wisconsin; M.A.,J.D.
1968, Yale University. I am indebted to Donna Parssinen for research assistance.
1. See R. BoRK, THE ANTITRusr PARADOX (1978) (antitrust rules impair economic efficiency
and are incoherent); R. POSNER, ANITrEusT LAW: AN EcONOMxc PERSPEaVE (1976) (advocating
fundamental changes in antitrust remedies to promote economic competition); Easterbrook,
The Limits of Antitrust, 63 TEX. L. REv. 1 (1984) (suggesting that current antitrust analysis is too
complex and actually may decrease competition and proposing a filter approach to
guarantee economic efficiency). The critics' constricted vision of antitrust has been the object
of several critical reviews. See, e.g., Fox, The Politics of Law and Economics in Judicial Decision
Making: Antitrust as a Window, 61 N.Y.U. L. REv. 554, 571-76 (1986) (contending that
Easterbrook's analysis is based upon social-political preference rather than economic princi-
ples); Hovenkamp, Antitrust Policy After Chicago, 84 MICH. L. REv. 213, 284 (1985) (claiming that
numerous internal and external flaws in reasoning of Chicago School will lead to its demise).
In fairness, none of the above-listed scholars is as completely negative about antitrust as are
Professors Armentano and Demsetz. See D. AR.MENTANO, ANTITRUST AND MONOPOLY: ANATOMY OF A
PoucY FMALURE (1982) (advocating complete repeal of antitrust laws); Demsetz, Dialogue, in
INDUSTRIAL CONCENTRATION: THE NEW LEARNING 233, 235-36 (H. Goldschmid, H. Mann & J.
Weston eds. 1974) (advocating the repeal of antitrust law as it is presently being carried out
in order to allow efficiency mergers).
2. See, e.g., UNITED STATES DEPARTIENT OF JUSTICE, MERGER GUIDELINES (1984), reprinted in
Merger Guidelines Issued by Justice Department, June 14, 1984, and Accompanying Policy Statement,
Antitrust & Trade Reg. Rep. (BNA) No. 1169, at S-1 (noting that mergers play an important
role by penalizing inefficient management); UNITED STATES DEFARTmENT OF JUSTICE, VERTIACAL
RESTRAINT GUIDELINES (1985), reprinted in U.S. Department of Justice Vertical Restraint Guidelines
Dated: January 23, 1985, Antitrust & Trade Reg. Rep. (BNA) No. 1199, at 3 (Jan. 24, 1985)
(describing relatively simple standards to screen cases in order to identify whether a restraint
has an anticompetitive effect).
3. See, e.g., Business Elecs. Corp. v. Sharp Elecs, Corp., 485 U.S. 717, 733 (holding
vertical restraint of trade not per se illegal under § 1 of Sherman Act unless it includes some
agreement of price or price levels), cert. denied, 108 S. Ct. 1727 (1988); Cargill, Inc. v. Monfort,
479 U.S. 104, 117 (1986) (holding threat of lost profits due to possible price competition
following merger not antitrust injury); Matsushita Elec. Indus. v. Zenith Radio Corp., 475 U.S.
574, 593-94 (1986) (encouraging summary judgment dismissals of predatory price-fixing
claims to prevent antitrust legislation from chilling competition), cert. denicd, 481 U.S. 1029
(1987); Spray-Rite v. Monsanto, 465 U.S. 752, 764 (establishing strict evidentiary standard to
1175

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