1. James Reston, “Washington; Kennedy and Bork,” New York Times, July 5, 1987.
2. Bork did not introduce the concept of “consumer welfare” with publication of The Antitrust Paradox in 1978. Mark Green and Ralph Nader, in their 1972 critique of America’s antitrust laws, The Closed Enterprise System, used the term right at the beginning of that book. “The maximization of consumer welfare [is] our talisman—not the value of small or big enterprise for their own sakes.” Indeed, Nader and his allies wrote, it was time for the Federal Trade Commission to abandon its “constituency, the small businessman” and instead focus on “the consumer” (Mark Green, Ralph Nader, and Beverly Moore, The Closed Enterprise System: Ralph Nader’s Study Group Report on Antitrust Enforcement [New York: Bantam Books, 1972], xviii, 409). But it should also be noted that Bork later claimed to have largely finished The Antitrust Paradox in 1969 but then delayed publishing it, due to the illness of his wife and to his work as solicitor general. (George Priest, “Bork’s Strategy, Price Fixing, and the Influence of the Chicago School on Modern Antitrust Law,” John M. Olin Center for Studies in Law, Economics, and Public Policy, Research Paper No. 487, December 11, 2013.)
3. Myers v. United States, 272 U.S. 52, 293, 47 S. Ct. 319, 71 L. Ed. 580 (1927).
4. One of the best histories of this effort is Matt Stoller, Goliath: The 100-Year War Between Monopoly Power and Democracy (New York: Simon & Schuster, 2019).
5. In The Antitrust Paradox, Bork simply rejects, out of hand, the idea that capitalists will ever sell goods or services below cost in order to drive out rivals, despite an overwhelming body of evidence dating back to the British East India Company. Bork recognizes that it is theoretically possible for corporations to engage in predatory pricing, especially in a case where “the predator has greatly disproportionate reserves or is able to inflict very disproportionate losses” (Bork, The Antitrust Paradox, 147). But he then goes on to say that no one had come up with a reasonable theory as to why any corporation would engage in predation. “Unsophisticated theories of predation abound,” he writes. And further, that such ideas “foolishly … ignore the constraints the market places upon firm behavior” (emphasis added, ibid., 144).
6. “Washington News,” United Press International, January 12, 1984.
7. Bork, The Antitrust Paradox, x.
8. Lippmann, Drift & Mastery, 73, 74, 87, 145, 168.
9. Walter Weyl, The New Democracy (New York: Macmillan, 1912; reprint New York: Harper & Row, 1964), 250.
10. Ibid., 250.
11. Ibid., 253.
12. Louis Brandeis, “Cutthroat Prices: The Competition That Kills,” Harper’s Weekly, November 15, 1913.
13. Steve Coll, Deal of the Century: The Breakup of AT&T (New York: Simon & Schuster, 1988), 29–35, 62.
14. On accusing Baxter of breaking the law, see Charles Babcock, “Baxter Causes Delight and Outrage,” Washington Post, February 7, 1982. Quotes from Metzenbaum, “Is William Baxter Anti-Antitrust?”
15. Steve Lohr, “Antitrust: Big Business Breathes Easier,” New York Times, February 15, 1981.
16. Angus Burgin, The Great Persuasion (Cambridge, MA: Harvard University Press, 2012); Stoller, Goliath, 2019.
17. Christopher Leonard, Kochland: The Secret History of Koch Industries and Corporate Power in America (New York: Simon & Schuster, 2019).
18. Green, Nader, and Moore, The Closed Enterprise System: Enforcement, xvii, xviii.
19. Sean Wilentz, “General Editors’ Introduction,” in John Kenneth Galbraith, The New Industrial State, 4th ed. (Princeton, NJ: Princeton University Press, 2007).
20. A good example is the following passage from Economics and the Public Purpose: “The older socialism allowed of ideology. There could be capitalism with its advantages and disadvantages; there could be public ownership of the means of production with its possibilities and disabilities. There could be a choice between the two. The choice turned on belief—on ideas. Thus it was ideological. The new socialism allows of no acceptable alternatives; it cannot be escaped except at the price of grave discomfort, considerable social disorder and, on occasion, lethal damage to health and well-being. The new socialism is not ideological; it is compelled by circumstance. The compelling circumstance, as the reader will have suspected, is the retarded development of the market system.” John Kenneth Galbraith, Economics and the Public Purpose (Boston: Houghton Mifflin, 1973), 300–301.
21. Ibid., 234–235.
22. Ibid., 301.
23. Ibid., 299.
24. Ibid., 303.
25. Ibid., 307.
26. Galbraith, Nader wrote, had provided a “useful dichotomy, the American economy could be functionally divided into two economies: the market system and the planning system. In the former, small businessmen and service firms compete among themselves according to the model of the marketplace. But the planning system, by and large the financial, manufacturing and mining sectors, is dominated by our giant corporations” (Nader, Green, and Seligman, Taming the Giant Corporation, 27).
27. Interview with Alfred E. Kahn, December 10–11, 1981, final edited transcript, Carter Presidency Project, Charlottesville, Virginia. Kahn was also the mastermind of the “deregulation” of the American airline industry. As Phillip Longman and Lina Khan reported in the Washington Monthly in March 2012, in an article titled “Terminal Sickness,” not only did deregulation free the airlines to limit the size of seats, it played a huge role in the sharp economic decline of heartland cities like Cincinnati, Minneapolis, Memphis, and St. Louis, relative to cities like New York and Chicago. It also failed to lower prices. See also Paul Dempsey and Andrew Goetz, Airline Deregulation and Laissez-Faire Mythology (Westport, CT: Quorum Books, 1992).
28. Stoller, Goliath.
29. Robert Reich, Saving Capitalism: For the Many, Not the Few (New York: Knopf Doubleday, 2015), 183.
30. Robert Reich, The Work of Nations (New York: Vintage, 1992), 140.
31. E. J. Dionne, “Inventing Clintonomics,” Washington Post, October 15, 1992.
32. Reich, “The Political Roots of Widening Inequality.”
33. Jesse Eisinger and Justin Elliott, “These Professors Make More Than a Thousand Bucks an Hour Peddling Megamergers,” ProPublica, November 16, 2016.
34. 1968 Merger Guidelines, The United States Department of Justice Archives. Available online at https://www.justice.gov/archives/atr/1968-merger-guidelines. Emphasis added.
35. Ibid.
36. 1984 Merger Guidelines, United States Department of Justice Archives. Available online at https://www.justice.gov/archives/atr/1984-merger-guidelines.
37. The Reagan administration Department of Justice published new guidelines in 1982, then revised those in 1984.
38. Bork, The Antitrust Paradox, 394.
39. Ibid., 397.
40. Strangely, Bork in The Antitrust Paradox defends the practice of resale price maintenance, which as we have seen is one of the most effective tools in preventing price discrimination by powerful intermediaries. Bork characterized the reasoning of Justice Hughes in the Dr. Miles case as “mistaken economics” (ibid, 288). Bork’s reasoning, however, fits within his larger philosophy. “When a manufacturer wishes to impose resale price maintenance or vertical division of reseller markets, or any other restraint upon the rivalry of resellers, his motive cannot be the restriction of output and, therefore, can only be the creation of distributive efficiency” (ibid., 289). This contradiction, between defending discrimination and also resale price maintenance, raises the question of whether Bork fully understood the implications of the policies he was promoting.
41. The Clinton administration, during eight years in power, brought only one Robinson-Patman case. William Kovacic, “The Modern Evolution of U.S. Competition Policy Enforcement Norms,” Antitrust Law Journal 71, no. 2 (2003): 411.
42. Burke, “Speech on Fox’s East India Bill.”
43. Globalization itself, Reich added, was simply our wish—as consumers—fulfilled. “Intensifying competition for us as consumers and as investors has made the entire economy more productive. In order to be successful, CEOs and financiers have had to move money, machinery, factories, and other assets to where they can be most valuable.” Robert Reich, Supercapitalism: The Transformation of Business, Democracy, and Everyday Life (New York: Knopf, 2007), 97.
44. For a more complete discussion of how concentration of corporate power can result in the destruction of vital industrial arts and capacities, see my previous book, Cornered.
45. John Kwoka’s excellent book, Mergers, Merger Control, and Remedies (Cambridge, MA: MIT Press, 2014), examines a number of instances in which mergers have resulted in higher prices. A particularly good example of how concentration results in higher prices is the creation of group purchasing organizations, theoretically to assist hospitals in buying supplies, like bedpans or gauze or syringes, as described by Mariah Blake in the article “Dirty Medicine,” in the Washington Monthly, in July 2010. The antitrust economists Robert Litan and Hal Singer that year released a study in which they estimated that the concentration of power in the GPOs enabled medical device manufacturers to charge Americans $35 billion more than they would be able to in a more competitive market. Margaret Dick Tocknell, “GPOs Driving Up Hospitals’ Medical Device Costs, Say Manufacturers,” HealthLeaders Media, October 10, 2010.
46. As we noted in chapter four, political economists have long understood that the concentration of extreme power over large swaths of the economy and society can result in the destruction of any real sense of “ownership” or “responsibility” over real properties ranging from land to industrial systems.
47. A good short article on the problem is Lynn, “Built to Break: The International System of Bottlenecks in the New Era of Monopoly,” Challenge Magazine, vol. 55, no. 2, March/April 2012, 87–107.
48. Alessandro Acquisti and Hal Varian, “Conditioning Prices on Purchase History,” August 2001 (revised October 2004).
49. Ibid., emphasis added.