¹ Markham, Jesse W., “Economic Analysis,” Proceedings of the Section of Antitrust Law, American Bar Association, Washington, D.C., 04 1–2, 1954, 145–56.Google Scholar

² Ibid., 145–6.

³ Commons, John R., Legal Foundations of Capitalism (New York, 1924).Google Scholar Typical of Commons' analysis is the following: “If you watch the development of the credit system out of the customs of business men in buying and selling, borrowing and lending, and out of the customs of courts in deciding disputes, according to the changing common rules, you will see how political economy evolved. The desirable customs were selected gradually by the courts, the undesirable customs were progressively eliminated as bad practices, and out of the whole came the existing economic process, a going concern, symbolized by a flux of prices, and operating to build up an artificial mechanism of rules of conduct, creating incorporeal and intangible property quite different from the unguided processes of nature.” (p. 377)

⁴ E.g., Joe S. Bain concludes, “The principal general indications of studies of American market structure are (1) that concentration of output among relatively few sellers is the dominant pattern. …” (“Price and Production Policies” in Ellis, H. S., ed., A Survey of Contemporary Economics, I, Philadelphia, 1948, 136.Google Scholar) But cf. Clair Wilcox, “It may safely be concluded that oligopoly is not, by all evidence, the ruling market form in the modern economy and that it does not, in fact, comprehend the great majority of actual cases.” (“On the Alleged Ubiquity of Oligopoly,” American Economic Review, XL, no. 2, 05, 1950, 73.Google Scholar)

⁵ “The dominance of oligopolistic situations in actual markets implies in effect that reliable a priori predictions may not be available.” Bain, , “Price and Production Policies,” 137.Google Scholar

⁶ Papandreou, A. G., in a review of Chamberlin, E. H., ed., Monopoly and Competition and Their Regulation (London, 1954)Google Scholar in American Economic Review, XLV, no. 1, 03, 1955, 158.Google Scholar

⁷ Keezer, Dexter Merriam, “The Effectiveness of the Federal Antitrust Laws: A Symposium,” American Economic Review, XXXIX, no. 3, 06, 1949, 722–3.Google Scholar

⁸ Markham, , “Economic Analysis,” 146.Google Scholar

⁹ A per se offence is one that is considered illegal as such. If the facts are established to prove the offence, no evidence of an economic or other nature is accepted as justifying it. For example, section 34 of the Combines Investigation Act makes it illegal for any supplier to require or induce any other person to resell a product at a specific price or at a minimum price. If the offence were proved, no economic evidence would be accepted in justification of it. This is, of course, an example of an offence established by statute. Per se offences may also arise from decisions of the courts interpreting statutes in which specific forms of conduct are not prohibited in express terms.

¹⁰ However, as will be argued below, there are few aspects of current combines administration that do not find very broad acceptance among economists. Merger and monopoly cases are more likely to involve the considerations here referred to.

¹¹ Canada, House of Commons Debates, 06 10, 1952, p. 3113.Google Scholar

¹² Duff, C.J., in Container Materiah Ltd. et al. v. The King (1942) 77 C.C.C. 129 at 134.

¹⁸ Investigation into an Alleged Combine in the Purchase of Maple Syrup and Maple Sugar in the Province of Quebec (Ottawa: Dept. of Justice, 1953).Google Scholar

¹⁴ Heflebower, Richard B., “Economies of Size,” Journal of Business of the University of Chicago, XXIV, no. 4, 10, 1951, 253.CrossRefGoogle Scholar

¹⁵ Cf., Seligman, E. R. A., “Railway Tariffs and the Interstate Commerce Law,” Political Science Quarterly, II, no. 3, 1887, 373–4.Google Scholar “The whole trend of modern development is to substitute the large for the small, to put combination in the place of competition. We cannot stop the progress; we must recognize it. … We have believed in the universal existence and beneficence of free competition; we have wilfully blinded our eyes to what was taking place about us; and today we wake up only to recognize the existence of these gigantic combinations. To legislate against them and fall back again on the specific of free competition would be absolutely futile. Competition has had its day and has proved ineffective. … Recognize the combinations but regulate them.”

¹⁶ Lilienthal, David, Big Business: A New Era (New York, 1953).Google Scholar Lilienthal would not, however, interfere with action against collusive arrangements. “Agreements to limit production, or fix prices, to allocate or divide markets, to suppress innovation, to exert economic pressure or to engage in a boycott to keep newcomers from entering into competition—these are among the many courses of conduct over which these public servants [the Anti-Trust Division of the Department of Justice and the Federal Trade Commission] have for years exercised a policeman's function, and a highly salutary one” (p. 169). And later, “… it is my view that the enforcing officers should concentrate on these specific policing functions, which should be maintained and even strengthened in their administration” (p. 170).

¹⁷ Perhaps the leading exponent of this general type of policy is Professor B. S. Keirstead. See his The Theory of Economic Change (Toronto, 1948), esp. chap, XVIIGoogle Scholar; and Essentials of Price Theory (Toronto, 1942), esp. 123–60.Google Scholar

¹⁸ Mason, E. S., “Schumpeter on Monopoly and the Large Firm,” Review of Economics and Statistics, XXXIII, no. 2, 05, 1951, 140.Google Scholar

¹⁹ Ibid., 143. On this general thesis, Adelman comments: “The alleged opposition between competition and technological progress is difficult to accept. Where profits on old methods and old products are melted away by competition, the urge is greatest to seek the profits of new products and methods. Conversely, where profits can be maintained by monopolies or cartels, the urge is less. Surely a comparison of Europe with the United States confirms the theory; even more to the point is a comparison with under-developed countries, with their small-scale industries monopolizing even smaller markets. The better record of American industry is more plausibly explained by a more competitive environment than by oligopoly per se. For the other nations have more oligopoly and less progress.” Adelman, M. A., in a “Symposium Review: Galbraith's Concept of Countervailing Power and Lilienthal's Big Business ,” Northwestern University Law Review, XLIX, no. 2, 05-June, 1954, 157.Google Scholar

²⁰ Markham, Jesse W., “An Alternative Approach to the Concept of Workable Competition,” American Economic Review, XL, no. 3, 06, 1950, 359.Google Scholar

²¹ Bain, Joe S., “Economies of Scale, Concentration and Entry,” American Economic Review, XLIV, no. 1, 03, 1954, 38–9.Google Scholar

²² Osborn, Richards C., Effects of Corporate Size on Efficiency and Profitability (Urbana, 1950), 74.Google Scholar

²³ Jewkes, John, “The Size of the Factory,” Economic Journal, LXII, no. 246, 06, 1952, 251.Google Scholar

²⁴ Adelman, M. A., “Business Size and Public Policy,” Journal of Business of the University of Chicago, XXIV, no. 4, 10, 1951, 271.Google Scholar

²⁵ Stigler, George J., Five Lectures on Economic Problems (London, 1949), 54.Google Scholar

²⁶ See Kaysen, Carl, “Looking Around,” Harvard Business Review, XXXII, no. 3, 05-June, 1954, 148.Google Scholar

²⁷ See, e.g., the President's address at the 88th annual meeting of the Canadian Bank of Commerce, Globe and Mail, Toronto, 12 15, 1954.Google Scholar

²⁸ The literature on “workable” or “effective” competition is quite extensive. Some of the better-known writings are: Clark, J. M., “Toward a Concept of Workable Competition,” American Economic Review, 06, 1940 Google Scholar, reprinted in American Economic Association Committee, Readings in the Social Control of Industry (Philadelphia, 1942), 452–75Google Scholar; Stigler, George J., “The Extent and Bases of Monopoly,” American Economic Review, 06, 1942, 1–22 Google Scholar; Markham, Jesse W., “An Alternative Approach to the Concept of Workable Competition,” American Economic Review, 06, 1950, 349–61Google Scholar; Adelman, M. A., “Effective Competition and the Antitrust Laws,” Harvard Law Review, 09, 1948, 1289–1350 Google Scholar; Bain, Joe S., “Workable Competition in Oligopoly: Theoretical Considerations and Some Empirical Evidence,” American Economic Review, 05, 1950, 35–47 Google Scholar; Mason, Edward S., “The New Competition,” Yale Law Review, autumn, 1953, 37–48 Google Scholar, and “The Current Status of the Monopoly Problem in the United States,” Harvard Law Review, 06, 1949, 1265–85Google Scholar; Edwards, Corwin D., Maintaining Competition (New York, 1949), 9–11.Google Scholar

²⁹ Mason, Edward S., “The New Competition,” 48.Google Scholar

³⁰ Clark, J. M., “Toward a Concept of Workable Competition,” 455.Google Scholar

³¹ Stigler, G. J., “The Extent and Bases of Monopoly,” 3.Google Scholar

³² Adelman, M. A., “Effective Competition and the Antitrust Laws,” 1303.Google Scholar

³³ Bain, Joe S., “Workable Competition in Oligopoly,” 37.Google Scholar

³⁴ “Whether a given industry is judged to be workably competitive will depend to a very substantial extent on the ‘ideology’ of the judges. And who is to say in these terms whether the American economy is or is not more ‘broadly competitive’ now than it was in 1890?

“Whatever answer is given to this question, I believe myself that the American economy is in fact substantially more ‘workably competitive’ than it would have been without the existence of the antitrust acts. This is due, I believe, not so much to the contribution that particular judgments have made to the restoring of competition as it is to the fact that the consideration of whether a particular course of business action may or may not be in violation of the antitrust acts is a persistent factor affecting business judgments, at least in large firms.” ( Mason, Edward S., in Keezer, Dexter M., ed., “The Effectiveness of the Federal Antitrust Laws: A Symposium,” American Economic Review, XXXIX, no. 3, 06, 1949, 713.Google Scholar)

³⁵ Report of the Committee to Study Combines Legislation and Interim Report on Resale Price Maintenance (Ottawa, 1952), 43–4.Google Scholar

³⁶ Ibid., 34.

³⁷ Fruits and vegetables (B.C.), Rex v. Staples et al. (1940); and matches, Rex v. Eddy Match Company Limited et al. (1951).

³⁸ Rex v. Elliott (1905) O.L.R. 648 (Ontario Court of Appeal) at 661.

³⁹ See, e.g., Regina v. Firestone Tire & Rubber Company of Canada, Limited et al. (1954) 107 C.C.C. 290–2.

⁴⁰ Ibid.

⁴¹ This argument was developed fully by Mr. John J. Robinette, Q.C., in The Queen v. Northern Electric Company, Limited, et. al., Trial Proceedings, Supreme Court of Ontario, March, 1955, 2846–3111.

⁴² Ibid., Judgment, 3353–4.

⁴³ Ibid., 3359–60.

⁴⁴ For a detailed discussion of the remedial measures available prior to the amendment of the Combines Investigation Act in 1952, see McGregor, F. A., “Preventing Monopoly–Canadian Techniques” in Chamberlin, , ed., Monopoly and Competition and Their Reguhtion, 371–9.Google Scholar

⁴⁵ Howard, John A., “British Monopoly Policy: A Current Analysis,” Journal of Political Economy, LXII, no. 4, 08, 1954.Google Scholar Professor Howard contrasted the British and American policies in the following terms:

“The most obvious contrast is with respect to firm size. American policy views size with some skepticism, whereas the British policy looks upon size as a desirable attribute.

“American policy holds most collusive arrangements to be illegal per se, whereas under British policy none are illegal per se. However, this suggests a much greater difference than exists in fact. Although there are certain collusive practices—namely, price-fixing, boycotts, and territorial allocation—which American policy condemns under any circumstances—there is a penumbra between these clear-cut instances and the acceptable agreements, where the rule of reason has been applied. Moreover, it is possible that a form of the per se approach will become a part of the British policy. The Monopolies Act specifically provides that the effects of a particular practice throughout industry may be investigated. If the effects are found to be unsatisfactory, then it will be possible to prohibit the practice generally rather than to confine the prohibition to an industry.” (p. 310)

⁴⁶ SirClay, Henry, “The Campaign against Monopoly and Restrictive Practices,” Lloyds Bank Review, 04, 1952, 26–7.Google Scholar A similar view was expressed in the debates on the Monopolies and Restrictive Practices (Inquiry and Control) Bill, 1948. See, e.g., United Kingdom, House of Commons, Parliamentary Debates, 04 22, 1948.Google Scholar See also “Monopolies under Full Employment,” The Times, 05 23, 1955 Google Scholar, in which the “growing volume” of criticism of the Monopolies Commission is analysed.

⁴⁷ London: H.M.S.O., Oct. 20, 1953.

⁴⁸ Ibid., 77. See also Hunter, Alex, “The Monopolies Commission and Economic Welfare,” Manchester School, XXIII, no. 1, 01, 1955, esp. p. 26.Google Scholar

⁴⁹ London: H.M.S.O., April 13, 1954.

⁵⁰ Ibid., 71.

⁵¹ Ibid., 72.

⁵² Groes, Ebbe, “Danish Monopoly Legislation–The Next Stage,” Cartel, 01, 1954, 4.Google Scholar

⁵³ Wright, David McCord, Capitalism (New York, 1951), 167.Google Scholar

⁵⁴ Ibid., 169.

⁵⁵ See Nourse, E. G. et al., America's Capacity to Produce (Washington, 1934)Google Scholar, where most cases of persistent excess capacity were found to be due to the factors listed above. Quoted in Heflebower, , “Monopoly ana Competitition in the United States of America” in Chamberlin, , ed., Monopoly and Competition and Their Reguhtion, 110.Google Scholar

⁵⁶ Mills, F. C., Prices in Recession and Recovery (New York, 1936), 425–6.Google Scholar

⁵⁷ “A producer may cut prices below his own average costs, even if he has a sloping individual demand curve. Probably, in a mature industry, low-cost producers do not often indulge in this dangerous form of rivalry; and it is somewhat less dangerous to the general solvency of the trade if only high-cost producers do it. But trades sometimes get demoralized. And if they secure protections, as under the American fair-trade laws, they probably tend to over-reach themselves.” ( Clark, J. M., “Competition and the Objectives or Government Policy” in Chamberlin, , ed., Monopoly and Competition and Their Regulation, 330.Google Scholar)

⁵⁸ See ibid., 336.

⁵⁹ See Wright, , Capitalism, 192.Google Scholar

⁶⁰ Ibid.