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62 Tex. L. Rev. 1263 (1983-1984)
Technology, Politics, and Regulated Monopoly: An American Historical Perspective

handle is hein.journals/tlr62 and id is 1285 raw text is: Technology, Politics, and Regulated Monopoly: An American Historical Perspective Herbert Hovenkamp* I. Introduction: Technology, Politics, and the Historical Problem of Monopoly Americans have always loved technology and hated monopoly. That conclusion may be troublesome to someone familiar with the vol- ume of antitrust litigation today in high technology areas,' but there is no necessary contradiction. Americans' affair with time- and labor- saving devices dates far back into the colonial era, to founding fathers such as Benjamin Franklin and Thomas Jefferson.2 It developed through the nineteenth century, when entrepreneurs were numerous, labor was scarce, and economic growth was particularly rapid.3 The initial appearance of the lightning rod, cotton gin, steamboat, or rail- road created no credible threat that anyone would corner a large Amer- ican market. Markets were growing so fast that no one could corner them easily.4 Moreover, the great American monopolies of the early nineteenth century were de jure--created not by technology, patents, and the marketplace, as most twentieth century de facto monopolies were, but by monopoly charters given to firms by the government.5 * Associate Professor of Law, University of California, Hastings College of the Law. B.A. 1969, Calvin College; M.A. 1971, Ph.D. 1976, J.D. 1978, University of Texas. 1. For a survey of recent monopolization litigation, mostly in high technology markets, see Flynn, Monopolization Under the Sherman Act: The Third Wave and Beyond, 26 ANTITRUST BULL. 1 (1981); Sullivan, Monopolization: Corporate Strategy, the IBM Cases, and the Transforma- tion of the Law, 60 TEXAS L. REV. 587 (1982). 2. See generally D. BOORSTIN, THE AMERICANS: THE COLONIAL EXPERIENCE 251-59 (1958) (discussing Franklin and his ingenious discoveries concerning electricity); D. BOORSTIN, THE LOST WORLD OF THOMAS JEFFERSON 3-8 (1948) (noting the pragmatic nature of American concerns as opposed to the more abstract concerns of Europeans); B. HINDLE, THE PURSUIT OF SCIENCE IN REVOLUTIONARY AMERICA 1735-1789 (1956) (detailing the growth of groups of Americans, primarily doctors, formed to explore natural history and science). 3. See D. BOORSTIN, THE AMERICANS: THE NATIONAL EXPERIENCE 10-25, 148-52 (1965); S. RATNER, J. SOLTOW & R. SYLLA, THE EVOLUTION OF THE AMERICAN ECONOMY: GROWTH, WELFARE, AND DECISION MAKING 233-41 (1979); G. TAYLOR, THE TRANSPORTATION REVOLU- TION, 1815-1860, at 392-95 (1951). 4. See North, Aspects of Economic Growth in the United States, 1815-1860, in THE EXPERI- ENCE OF ECONOMIC GROWTH: CASE STUDIES IN ECONOMIC HISTORY 235, 245-51 (B. Supple ed. 1963). Only after the building of industrial capacity began to exceed the growth rate did large scale monopolies appear. See S. RATNER, J. SoLTow & R. SYLLA, supra note 3, at 286-88. 5. See infra text accompanying notes 31-37. In this Article the term de jure refers to a 1263

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