The Economists and the Problem of Monopoly

For much too long a time, students of the history of the American antitrust policy have been at least mildly perplexed by the coolness with which American economists greeted the Sherman Act. Was not the nineteenth century the period in which the benevolent effects of competition were most widely extolled? Should not a profession praise a Congress which seeks to legislate its textbook assumptions into universal practice? And with even modest foresight, should not the economists have seen that the Sherman Act would put more into economists' purses than perhaps any other law ever passed? Of course there were partial explanations. The coolness of the economists sometimes rested more on disbelief in the efficacy of the Sherman Act than on hostility to its purpose. The route of regulation was preferred-although this preference hardly restores the reputations of those economists as prophets. One might even point out that there were not many good American economists at the time, although an undeniable giant such as Irving Fisher shared the common view. I intend on this occasion to review the attitudes of economists toward monopoly as a problem in public policy. My subject, however, is a good deal broader than the Sherman Act and its reception: the last two centuries of the economic writings on monopoly policy, particularly in England and the United States, will be surveyed. Thereafter I shall examine the reciprocal effects of economics and antitrust policy.

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