Gould, richard holden, anup malani, sam peltzman, christopher snyder sponsored by the university of chicago booth school of business and the university of chicago law school. The profound nonsense of consumer welfare antitrust. Jul 06, 2016 the legislative history of the sherman act reexamined 1992 20 economic inquiry 263 at 266 and robert h bork legislative intent and the policy of the sherman act 1966 9 jle 7 at 14. Passo every violation of the antitrust laws is a blow to the freeenterprise system envisaged by congress. A cynical interpretation ofthe sherman act this year is the 100th anniversary ofone of the most famous or. Borks influence upon modern antitrust law is difficult to overstate. Gould, richard holden, anup malani, sam peltzman, christopher snyder sponsored by the university of chicago booth school. Competition policy international cpi is an independent knowledgesharing organization focused on the diffusion of the most relevant antitrust information and content worldwide.
Antitrust decisions and legislative intent university of missouri. Until the advent of the reagan administration there was an general consensus in the courts and in most of academia with regard to the values underlying and the goals of federal antitrust policy. Bork, legislative intent and the policy of the sherman act, the journal of law and economics 9, no. The proconsumer view of the sherman act has been most thoroughly elaborated by robert bork, who writes. Antitrust in great britain and america, 18801990 cambridge, 1992. Competition policy international cpi is an independent knowledgesharing organization focused on the diffusion of the most relevant antitrust information and content. On the origins of the sherman antitrust act cato institute. For the last four decades, federal courts have construed the sherman act as a consumerwelfare statute. This has led, quite naturally, to extensive historical study of the legislative history and substantial debate about congressional intent, especially where the sherman act is concerned. Legislative intent and the policy of the sherman act the. The sherman antitrust act of 1890 the entire act is fewer than 800 words, and the primary intent was to limit anticompetitive behaviors such as trusts, cartels, and monopolies. A brief overview of american antitrust law pdf 249kb oxford law. Beginning with the clayton act,12 especially section 2, the.
The legislative history of the sherman act reexamined by. Crane of all robert borks many important contributions to antitrust law, none was more significant than his identification of economic efficiency, disguised as consumer welfare, as the sole normative objective of u. Bork, the antitrust paradox 5666 1978 discussing legislative aims in enacting sherman, clayton, and federal trade commission acts hereinafter antitrust paradox. Legislative intent in regulation virginia uranium, inc. Jones highlighted the vast ambiguities of the legislative intent to exclude labor from the sherman statute. Some scholars have argued that the sherman act was directed almost entirely toward the achievement of allocative efficiency e. Original intent and the sherman antitrust act cambridge university. By placing these letters in historical context, this paper helps resolve a debate about sherman s true intentions in creating an antitrust law. Original intent and the sherman act 361 a primary concern for consume10 borr welfare.
How the competition act failed to achieve the legislative intent. Us and the tobacco trust for monopolization in 1911. In particular, sherman s letters reveal that he was more concerned with protecting the interests of. This article challenges that interpretation by reexamining the legislative history. Reagan administrations antitrust policy, original intent and the legislative history of the sherman act. This paper presents a survey of the letters of senator john sherman, who pushed for passage of the first federal antitrust law in the united states. As a result, the problem of congressional intentand thus. The sherman antitrust act of 1890 is a united states antitrust law that regulates competition among enterprises, which was passed by congress under the presidency of benjamin harrison. Debunking the purchaser welfare account of section 2 of the. Legislative intent and the policy of the sherman act by. In this article, neha jain does an analysis on why the competition act failed to achieve the legislative intent. Senator john sherman, and the political conflict generated by the most.
The legislative history of the sherman act displays the clear and exclusive policy intention of promoting consumer welfare 1978, 61. It is important to note, however, that the sherman act does not prohibit all restraints of tradeonly. The letters of john sherman and the origins of antitrust. A dichotomy in antitrust policy has developed due mainly to a failure of the courts to steadfastly adhere to original legislative intent of the sherman act and to the proliferation of confused confusing antitrust policies. Legislative intent and the policy of the sherman act. Why manufacturers should be wary when implementing. In a 1958 decision, the court had declared a quasiconstitutional vision of the antitrust laws in line with legislative intent. Legislative intent and the policy of the sherman act, journal of law and economics 9, 756. The university of oxford centre for competition law and policy. As a result, this paper reinforces previous public choice literature arguing that the 1890 sherman act was not passed in the public interest, but instead advanced private interests. Understanding the importance of free market in the last two centuries, the world has seen major shift in every sphere of human life be it social, technological, cultural or economical. Consumer welfare in the sherman acts state statutory forerunners abstract. Sherman act 7 foreign trade antitrust improvements act of 1982, 15 u. Jan 12, 2018 sherman was able to pursue his revenge motive by combining it with the broader republican goals of preserving high tariffs and attacking the trusts.
The legislative history of the sherman act, as well as the decisions of this court interpreting it, show that it was not aimed at policing interstate transportation or movement of goods and property. Reexamination a of the consumerwelfare hypothesis christopher grandy an important tenet of the chicago school of antitrust asserts that the sherman act s framers sought to foster consumer welfare. Legislative history an overview sciencedirect topics. Ftc,9 thesecond circuit reaffirmedmennensinterpretation of the legislative history and its policy implications.
In 1966 judge robert bork published an article in the journal of law. On the origins of the sherman antitrust act robert l. Bork examined the legislative history of the sherman act in search of the congresss intent in passing it and, therefore, the policies the judiciary should follow when deciding cases under the act. A policy at war with itself 66 1978 hereinafter bork, the antitrust paradox describing congress vision for the sherman act as a consumer welfare prescription. Abstract since the enactment of the sherman antitrust act of 1890, businesses have been prohibited from implementing both vertical and horizontal. That conclusion was adopted by the supreme court in 1979 and has formed the foundation for antitrust policy. The sherman acts legislative history indicates that congress intended to prohibit the same combinations in restraint of trade that were already prohibited by state statutory and common law. Legislative intent and the policy of the sherman act created date. Bork, legislative intent and the policy of the sherman act, 9 j. Should legislative intent be relevant to statutory interpretation. The unsound theory behind the consumer and total welfare. Bork, legislative intent and the policy of the sherman act,9j. A reexamination of the consumerwelfare hypothesis volume 53 issue 2 christopher grandy skip to main content we use cookies to distinguish you from other users and to provide you with a better experience on our websites. Abbott visiting fellow, all souls college, trinity term 2005 on leave from the u.
The key pieces of antitrust legislation in the united statesthe sherman antitrust act of 1890. But considerable disagreement persists within the legal academy regarding the true legislative aims of american antitrust law. Inspired by robert borks seminal article, legislative intent and the policy of the sherman act, this working paper undertakes a closer examination of the legislative history of section 5. Every person who shall make any contract or engage in any combination or. Borks legislative intent and the courts by douglas h. Thesherman act was designed tobe acomprehensive charter of economic liberty aimed at preserving free. This system depends on strong competition for its health and vigor, and strong competition depends, in turn, on compliance with. The sherman act broadly prohibits anticompetitive agreements and unilateral conduct that monopolizes or attempts to monopolize the relevant market. Us antitrust law and policy in historical perspective harvard. One of his lasting legacies is his analysis of the legislative history, text, and structure of the sherman act, which led him to conclude the intent of the congress passing it was to maximize consumer welfare and economic efficiency.