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Published online by Cambridge University Press: 14 October 2011
The Reagan agenda embodied a single broad goal for domestic policy: to redefine the scope of public authority to limit the extent of state intervention in the market. This goal found a concrete expression in attempts to reverse welfare-state policies, restructure the tax system, and lighten the “regulatory burden.” The Reagan revolution was extended to antitrust. A number of top appointees were representatives of the Chicago school, a conservative group of economists and attorneys characterized by a faith in the efficiency-promoting nature of markets and a grave pessimism regarding government intervention in the economy. They rejected the political and social goals of antitrust and argued that the market rather than the state was best suited to determine the most efficient forms of economic organization.
1. James E. Anderson, “The Reagan Administration, Antitrust Action, and Policy Change.” Paper presented at the Annual Meeting of the Midwest Political Science Association, April 1986, 8.
2. Mueller, Willard F., “A New Attack on Antitrust: The Chicago Case,” Antitrust Law and Economics Review 18:1 (1986): 32.Google Scholar
3. Shepherd, William G., “The Twilight of Antitrust,” Antitrust Law and Economics Review 18:1 (1986): 24.Google Scholar Also see Adams, Walter, “Mr. Reagan and Antitrust,” in Heggestad, Arnold A., ed., Public Policy toward Corporations (Gainesville, Fla., 1986).Google Scholar
4. Interviews were conducted with political executives and career bureaucrats at the Department of Justice's Antitrust Division in January and August 1988. All quotations not accompanied with a footnote have been derived from this source.
5. For a discussion of goal compatibility, see Marc Allen Eisner, Antitrust and the Triumph of Economics: Institutions, Expertise, and Policy Change (Chapel Hill, forthcoming), and Meier, Kenneth J., Regulation: Politics, Bureaucracy, and Economics (New York, 1985).Google Scholar
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10. Posner, Richard A., Antitrust Law: An Economic Perspective. (Chicago, 1976).Google Scholar
11. Citation analysis was conducted on the two major antitrust journals: The Antitrust Bulletin and the American Bar Association's Antitrust Law Journal. The citation analysis entailed counting the number of times an author-work was cited per year for each five-year period. Multiple citations to a single work within a single article were not counted. The final number of citations per year was added and multiplied by the number of years within the five-year period that the author was cited, under the assumption that influence is not sporadic. See the discussion of citation analysis and methodology in Stigler, George, The Economist as Preacher and Other Essays (Chicago, 1982).Google Scholar The term “reputational structure” was drawn from Whitley, Richard, The Social and Intellectual Organization of the Sciences (London, 1984).Google Scholar
12. For traditional statements of this relationship, see Redford, Emmette S., Democracy in the Administrative State (New York, 1969).Google Scholar Also see Joseph Stewart, Jr., and Jane S. Cromartie, “Partisan Presidential Change and Regulatory Policy: The Case of the FTC and Deceptive Practices Enforcement, 1938–1974,” Presidential Studies Quarterly 12 (Fall): 568–73; Ogul, Morris, Congress Oversees the Bureaucracy (Pittsburgh, 1976)Google Scholar; and Key, V. O., “Legislative Control,” in Elements of Public Administration, Marx, Fritz Morstein, ed. (Englewood Cliffs, N.J., 1959).Google Scholar
It is important to note that the more sophisticated statements of the principal-agent relationship present the agent as a strategic actor not easily controlled. See Moe, Terry M., “The New Economics of Organization,” American Journal of Political Science 28 (1984): 739–77CrossRefGoogle Scholar, and Wood, B. Dan, “Principals, Bureaucrats, and Responsiveness in Clear Air Enforcement,” American Political Science Review 82 (1988): 213–34.CrossRefGoogle Scholar Compare these works with Weingast, Barry R. and Moran, Mark J., “Bureaucratic Discretion or Congressional Control? Regulatory Policymaking by the Federal Trade Commission,” Journal of Political Economy 91 (1983): 765–800.CrossRefGoogle Scholar
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14. See Long, Norton E., “Bureaucracy and Constitutionalism,” American Political Science Review 46 (1952): 808–18CrossRefGoogle Scholar; Niskanen, William A., Bureaucracy and Representative Government (Chicago, 1971)Google Scholar; Downs, Anthony, Inside Bureaucracy (Boston, 1967)CrossRefGoogle Scholar; Rourke, Francis, Bureaucracy, Politics, and Public Policy, 3rd ed. (Boston, 1984)Google Scholar; Fiorina, Morris P., Congress: Keystone of the Washington Establishment (New Haven, 1977).Google Scholar
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18. The political control thesis with respect to antitrust is discussed in some detail and tested statistically in Eisner, Marc Allen and Meier, Kenneth W., “Presidential Control versus Bureaucratic Politics: Explaining the Reagan Revolution in Antitrust,” American Journal of Political Science 34:1 (February 1990): 269–87.CrossRefGoogle Scholar
19. Arnold, Thurman W., “Antitrust Law Enforcement: Past and Future,” Law and Contemporary Problems 7:1 (Winter 1940): 9.CrossRefGoogle Scholar Also see Edwards, Corwin D., “Thurman Arnold and the Antitrust Laws,” Political Science Quarterly 58:3 (September 1943): 338–55CrossRefGoogle Scholar; and Hawley, Ellis W., The New Deal and the Problem of Monopoly (Princeton, 1966).CrossRefGoogle Scholar
20. Walton Hamilton and Irene Till, Antitrust in Action, Temporary National Economic Committee Monograph No. 16 (Washington, D.C., 1941), 33, 34. Also see Hodges, Edward P., “Complaints of Antitrust Violations and Their Investigation: The Work of the Complaints Section of the Antitrust Division,” Law and Contemporary Problems 7:1 (Winter 1940): 90–95.CrossRefGoogle Scholar
21. This point is emphasized in Suzanne Weaver, Decision to Prosecute.
22. See Koveleff, Theodore Philip, Business and Government During the Eisenhower Administration: A Study of the Antitrust Policy of the Antitrust Division of the Justice Department (Athens, Ohio, 1980)Google Scholar, and the discussion of Division briefs in Markham, Jesse W., “The Federal Trade Commission's Use of Economics,” Columbia Law Review (March 1964): 405–14.Google Scholar
23. Brown Shoe Co. versus United States, 370 U.S. 294 (1962), United States versus Philadelphia National Bank, 374 U.S. 321 (1963). See Neale, A. D. and Goyder, G. D., The Antitrust Laws of the U.S.A. A Study of Competition Enforced by Law, 3d ed. (Cambridge, 1980), 186–88Google Scholar, and Rowe, “The Decline of Antitrust and the Delusion of Models,” 1524.
24. Assistant Attorney General Orrick created a planning and evaluation system in 1963. However, the system was undermined by a lack of resources. See Green, Mark J., Moore, Beverly C. Jr, and Wasserstein, Bruce, The Closed Enterprise System (New York, 1972), and Weaver, Decision to Prosecute.Google Scholar
25. See the discussion of Turner in Weaver, Decision to Prosecute.
26. U.S. Department of Justice, Department of Justice Merger Guidelines, 1968, § 12.
27. Figures from U.S. Department of Justice, Annual Report of the Attorney General of the United States (Washington, D.C., various years).
28. See Weaver, Decision to Prosecute, 132–36. This point was emphasized by several interviewees. Richard MacLaren, Assistant Attorney General under Richard Nixon, was a practicing lawyer who had little interest in what were seen as the “academic” interests of Donald Turner.
29. Kauper, Thomas E., “The Role of Economic Analysis in the Antitrust Division Before and After the Establishment of the Economic Policy Office: A Lawyer's View,” The Antitrust Bulletin 29:1 (Spring 1984): 119–20.Google Scholar Also see Kauper, Thomas E., “Former AAG Kauper Looks Back at the Antitrust Division: An Interview,” Antitrust 1:1 (Fall 1986): 4–10.Google Scholar
30. Quotation drawn from correspondence of George Hay with the author, 1 April 1988.
31. This discussion closely follows the accounts of Thomas Kauper, George Hay, and a number of interviewees who worked at the Division in the early 1970s.
32. U.S. Department of Justice, Annual Report of the Attorney General of the United States (Washington, D.C., 1976), 55.Google Scholar
33. Bork, Antitrust Paradox, 287.
34. Continental T.V. Inc. v. G.T.E. Sylvama, Inc., 433 U.S. 36 (1977). See Neale and Goyder, The Antitrust Laws of the U.S.A., 286–87, and Bork, Antitrust Paradox, 285–88.
35. See Sullivan, E. Thomas, “The Antitrust Division as a Regulatory Agency: An Enforcement Policy In Transition,” Washington University Law Quarterly 64:4 (1986): 997–1055.Google Scholar On the requirements associated with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, see Brunner, Thomas W., Krattenmaker, Thomas G., Skitol, Robert A., and Webster, Ann Adams, Mergers in the New Antitrust Era (Washington, D.C. 1985).Google Scholar
36. U.S. Department of Justice, Antitrust Division Manual (Washington, D.C., 1979), V 2, I 26–27; U.S. Department of Justice, Annual Report of the Attorney General of the United States (Washington, D.C, 1978), 117.Google Scholar
37. Department of Justice, Annual Report, 117; Department of Justice, Antitrust Division Manual, VI 4–5.
38. Kauper, “The Antitrust Division,” 124.
39. See MacAvoy, Paul W., The Regulated Industries and the Economy (New York, 1979).Google Scholar
40. Presidential Documents of Gerald R. Ford, 12, 11 (1976), 349.
41. See Shenefield, John H., A Conversation with John H. Shenefield (Washington, D.C., 1979)Google Scholar, and Litvack, Sanford M., “Report from the Antitrust Division,” Antitrust Law Journal 49:3 (1981): 1073–78.Google Scholar
42. See Kahn, Alfred E., “I Would Do It Again,” Regulation 12:2 (1988): 22–28.Google Scholar
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44. Staffing figures provided by Frederick Warren-Boulton, Deputy Assistant Attorney General for Economic Analysis, Antitrust Division, Department of Justice.
45. See U.S. Department of Justice, Annual Report of the Attorney General of the United States (Washington, D.C., 1982).Google Scholar
46. Gorinson, Stanley M., “Antitrust Division Reorganized,” Antitrust 7:1 (October 1985): 18–19.Google Scholar
47. U.S. Department of Justice, Merger Guidelines, 1984, §1. See Fox, Eleanor M., “The 1982 Guidelines: When Economists Are Kings?” in Fox, Eleanor M. and Halverson, James T., eds., Antitrust Policy in Transition: The Convergence of Law and Economics (Chicago, 1985)Google Scholar, and Brunner et al., Mergers in the New Antitrust Era.
48. 1984 Merger Guidelines, § 3.21–3.23; 3.41–3.45; 3.5.
49. See “Antitrust Division Begins Review of Old Discredited Consent Decrees,” Antitrust and Trade Regulation Report 1032 (24 September 1981): A16–17Google Scholar, and Baxter, William, “Separation of Powers, Prosecutorial Discretion, and the ‘Common Law’ Nature of Antitrust Law,” Texas Law Review 60:4 (April 1982): 693.Google Scholar
50. Figures drawn from House and Senate appropriations hearings, 1981–86.
51. William Baxter, “Responding to the Reaction: The Draftsman's View,” in Fox and Halverson, ed., Antitrust Policy in Transition, 141.
52. See Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752 (1984).
53. The proposed legislation is reproduced, along with the comments of Attorney General Meese, Edwin III, in “The Reagan Administration's '86 Antitrust Proposals to Congress,” Antitrust Law and Economics Review 18:4 (1985): 35–47.Google Scholar See Boyle, Stanley E. and Piette, Michael J., “How Economists View Reagan's Five Proposed Antitrust Changes: A Survey,” Antitrust Law and Economics Review 18:2 (1986): 85–92.Google Scholar
54. See Björn Wittrock, Peter Wagner, and Hellmut Wollman, “Social Science and the Modern State: Knowledge, Institutions, and Societal Transformations,” Wissenschaftskolleg zu Berlin, Paper 87–3; Whitley, Richard, The Intellectual and Social Origins of the Sciences (London, 1984)Google Scholar; and Canterbery, E. Ray and Burkhardt, Robert J., “What Do We Mean by Asking Whether Economics Is a Science?” in Eichner, Alfred, ed., Why Economics Is Not Yet a Science (Armonk, N.Y. 1983).Google Scholar
