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The Antitrust Paradigm
Restoring a Competitive Economy
Language:
English
Published/Copyright:
2019
About this book
A new and urgently needed guide to making the American economy more competitive at a time when tech giants have amassed vast market power.
The U.S. economy is growing less competitive. Large businesses increasingly profit by taking advantage of their customers and suppliers. These firms can also use sophisticated pricing algorithms and customer data to secure substantial and persistent advantages over smaller players. In our new Gilded Age, the likes of Google and Amazon fill the roles of Standard Oil and U.S. Steel.
Jonathan Baker shows how business practices harming competition manage to go unchecked. The law has fallen behind technology, but that is not the only problem. Inspired by Robert Bork, Richard Posner, and the “Chicago school,” the Supreme Court has, since the Reagan years, steadily eroded the protections of antitrust. The Antitrust Paradigm demonstrates that Chicago-style reforms intended to unleash competitive enterprise have instead inflated market power, harming the welfare of workers and consumers, squelching innovation, and reducing overall economic growth. Baker identifies the errors in economic arguments for staying the course and advocates for a middle path between laissez-faire and forced deconcentration: the revival of pro-competitive economic regulation, of which antitrust has long been the backbone.
Drawing on the latest in empirical and theoretical economics to defend the benefits of antitrust, Baker shows how enforcement and jurisprudence can be updated for the high-tech economy. His prescription is straightforward. The sooner courts and the antitrust enforcement agencies stop listening to the Chicago school and start paying attention to modern economics, the sooner Americans will reap the benefits of competition.
Reviews
The Antitrust Paradigm is a call to action by a premier scholar of competition policy. Baker makes a compelling case to change the guidepost for U.S. antitrust enforcement from ‘do no harm’ to ‘do some good.’ Anyone with a keen interest in antitrust should read this book, and I hope that includes some judges.
-- Richard J. Gilbert, University of California, Berkeley, and former Deputy Assistant Attorney General for Economics in the Antitrust Division of the U.S. Department of Justice
-- Richard J. Gilbert, University of California, Berkeley, and former Deputy Assistant Attorney General for Economics in the Antitrust Division of the U.S. Department of Justice
Baker’s timely book will be required reading for competition policymakers. It provides a concise, sophisticated, and informed account of nearly fifty years of change that has reshaped antitrust law and legal doctrine, and uses that account to identify much-needed reforms that would contribute to greater competitive vitality in the American economy.
-- Andrew I. Gavil, Howard University School of Law
-- Andrew I. Gavil, Howard University School of Law
Jonathan Baker has written a superb and timely treatment of one of the hottest economic issues: how to make the economy more competitive, especially in the face of rapidly changing technology. Baker draws on his research and policy experience to write a book that avoids the heated rhetoric that often dominates these debates to instead present a compelling analysis and prescription that is firmly grounded in economic research.
-- Jason Furman, Harvard Kennedy School and former Chairman of the Council of Economic Advisers
-- Jason Furman, Harvard Kennedy School and former Chairman of the Council of Economic Advisers
Jonathan Baker is one of the country’s leading antitrust scholars. This well-written and thought-provoking book meticulously sets forth the theoretical and empirical foundation for his view that antitrust policy needs to be radically changed and must become much more active if the United States is to remain a dynamic economy. Even readers who disagree will be challenged to reexamine the reasons for their views.
-- Dennis W. Carlton, University of Chicago Booth School of Business and former Deputy Assistant Attorney General for Economic Analysis in the Antitrust Division of the U.S. Department of Justice
-- Dennis W. Carlton, University of Chicago Booth School of Business and former Deputy Assistant Attorney General for Economic Analysis in the Antitrust Division of the U.S. Department of Justice
Baker’s powerful and accessible prose makes the case for more vigorous twenty-first-century antitrust enforcement focused on market realities. He both diagnoses the problems and offers practical solutions. A must-read for those who care about ensuring markets that work to benefit consumers.
-- Bill Baer, former Assistant Attorney General in the Antitrust Division of the U.S. Department of Justice and former Director of the Bureau of Competition at the Federal Trade Commission
-- Bill Baer, former Assistant Attorney General in the Antitrust Division of the U.S. Department of Justice and former Director of the Bureau of Competition at the Federal Trade Commission
Contains a meticulous exploration of the most common theories of antitrust harm, spanning the rules on agreements, monopolies, and mergers. Baker focuses on these problems within the digital economy, seeking to make the case that despite its nineteenth century origins, the current US antitrust framework is sufficiently nimble to meet contemporary challenges.
-- Niamh Dunne Project Syndicate
-- Niamh Dunne Project Syndicate
Why are citizens not experiencing market competition in daily life? And is there hope that antitrust enforcement might rise to the challenge? Jonathan Baker provides an insightful analysis of antitrust enforcement from the origin of the Sherman Act, through the anti-enforcement ideology of the Chicago School, to present-day, corporate-friendly policies. The Antitrust Paradigm illuminates why antitrust is fashionable again in policy circles. It presents the economic and legal evidence of the decline in competition in an accessible and compelling fashion and then goes on to provide intelligent and interesting recommendations of changes to make to address particular competition problems that characterize the modern economy.
-- Fiona Scott Morton, Yale University School of Management
-- Fiona Scott Morton, Yale University School of Management
Jonathan Baker’s book is a stirring and painstaking achievement in both intellectual and political terms. It offers not only a subtle takedown of the Chicago School’s conceptual dominance over American antitrust law but a powerful redefinition of how intensifying market concentration actually hurts our economy and our people. The Antitrust Paradigm builds up into the most rousing kind of call to arms: one that is rooted in rigorous analysis, vivid facts, and a margin of practical hope. Baker has written a profoundly useful book.
-- Congressman Jamie Raskin (Maryland)
-- Congressman Jamie Raskin (Maryland)
A good overview of the current debate about competition policy, and the Chicago School versus neo-structuralist (aka ‘hipster’) clash going on in the U.S. at the moment.
-- Diane Coyle Enlightened Economist
-- Diane Coyle Enlightened Economist
Shows how antitrust reforms ostensibly aimed at spurring competition ended up causing an increase in market power.
-- ProMarket
-- ProMarket
A powerful argument for antitrust reform to bring about the benefits long and emptily promised by the Chicago School.
-- Harvard Law Review
-- Harvard Law Review
An extremely valuable contribution to what he rightly notes is one of the most compelling current debates.
-- Zephyr Teachout Democracy
-- Zephyr Teachout Democracy
An informed, thoughtful, and provocative antitrust manifesto that every antitrust thinker should read.
-- Barak Orbach Antitrust Source
-- Barak Orbach Antitrust Source
Topics
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Frontmatter
i -
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Contents
vii -
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Introduction
1 - I. The Market Power Paroxysm and the Antitrust Paradigm
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Chapter One. Market Power in an Era of Antitrust
11 -
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Chapter Two. The Faltering Political Consensus Supporting Antitrust
32 -
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Chapter Three. Preventing the Political Misuse of Antitrust
53 -
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Chapter Four. Recalibrating Error Costs and Presumptions
71 -
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Chapter Five. Erroneous Arguments against Enforcement
81 - II. Antitrust Rules and the Information Economy
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Chapter Six. Inferring Agreement and Algorithmic Coordination
99 -
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Chapter Seven. Exclusionary Conduct by Dominant Platforms
119 -
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Chapter Eight. Threats to Innovation from Lessened Competition
150 -
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Chapter Nine. Harms to Suppliers, Workers, and Platform Users
176 - III. Looking Forward
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Chapter Ten. Restoring a Competitive Economy
197 -
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Notes
211 -
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References
301 -
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Acknowledgments
337 -
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Index
339
Publishing information
Pages and Images/Illustrations in book
eBook published on:
May 20, 2019
eBook ISBN:
9780674238947
Pages and Images/Illustrations in book
