Review of Industrial Organization 12: 447–455, 1997.
The Causes and Consequences of Antitrust. Fred S. McChesney and William
F. Shughart II, editors. Chicago: University of Chicago Press, 1995, 392 pages,
$66.00 (cloth), $32.95 (paper).
This collection of papers, some previously published and some original to the
volume, is something of a “readings” companion to the earlier Antftrust Policy
and Interest Group Politics volume published by co-editor Shughart in 1990.
the previous volume, this collection seeks to answer the questions, Why has the
economic theory of regulation not been applied to antitrust enforcement? Why do
even the Chicago-school originators of the economic theory of regulation continue
to treat antitrust as a “public-interest” law whose enforcement can be improved by
advancing the general state of knowledge and by educating judges and enforcers?
And – more to the point in this volume, and a little petulantly – why, since the
public-choice school has already demonstratedthat antitrust enforcement is simply
one more captured, special-interest-oriented, counterproductive government activ-
ity, will the rest of the economics profession not accept this ﬁnding and join the
ﬁght for repeal?
The book is divided into ﬁve parts. Part one, “In Search of the Public-Interest
Model of Antitrust”, is mostly a collection of reprints of twenty- to thirty-year-old
articles that tried and failed to ﬁnd a relationship between antitrust enforcement
and broad measures of competitive problems in particular industries. Part two,
“The Positive Economics of Antitrust Enforcement”, presents more recent articles
seeking to show that antitrust enforcement usually has unforeseen and/or counter-
productive and/or anticompetitive consequences. Part three, “The Public-Choice
Model of Antitrust”, seeks to explain the failures shown in part two by demonstrat-
ing that antitrust enforcement is a creature of politics and, in the real world, has
nothing whatsoever to do with seeking to increase consumer welfare.
I discussed this volume in Pittman (1990a) and reviewed it in Pittman (1990b).
I do not exaggerate the position of the editors. Shughart’s earlier volume concluded, remarkably,
that “ ‘Consumer welfare’ does not appear in the objective function being maximized by antitrust”
(Shughart 1990, p. 190, emphasis added). The editors of the current volume describe antitrust as “a
policy that all sides concede has failed” (p. 347), one in which “neither ‘consumers’ nor ‘the public’
ever seem to appear on the list of demonstrated beneﬁciaries” (p. 349, emphasis added).