Mark Meador, a lawyer who was recently confirmed as Commissioner of the FTC, gave a fascinating speech to a recent American Compass event on his vision of "conservative antitrust policy." The speech has been republished in Commonplace, the magazine affiliated with American Compass.

It won't surprise you that it's an attack on the traditional conservative vision of antitrust that has obtained since the victory of the law and economics school in the 1970s and '80s. (Unless the actual "traditional" position is that of Teddy Roosevelt…)

Conservatives believe "big is bad." That includes big government, but also big business. And so, they "must reaffirm that concentrated economic power is just as dangerous as concentrated political power, and that rightly ordered political power is a necessary and appropriate tool for restraining excessive economic power and preserving liberty," Meador writes.

Beyond these big philosophical statements, which people may agree with or disagree, Meador's speech is a welcome and very scholarly analysis of the history of American antitrust law, and in particular with the best-known proponent of the consumer welfare standard, Judge Bork. Meador especially attacks Bork's contention that the consumer welfare standard forms a key part of the legislative history of American antitrust law.

"The problem for Bork is that the legislative and historical records yield almost no evidence that the drafters or supporters of the Sherman Antitrust Act were concerned with the efficient allocation of resources across the national economy, let alone that they would have wanted or expected judges to declare by judicial fiat what practices maximize total economic welfare. Prof. Robert Lande points out that the very concept of 'allocative efficiency' was barely in its incipiency in 1890, and it is nearly impossible that most economists—let alone any legislator—at the time even knew what it was."

While Meador agrees that the consumer welfare standard is important, Bork's definition, focusing as it does on economic efficiency, is inaccurate.

"Bork’s definition of consumer welfare may be one of the greatest sleights of hand in modern legal scholarship. While the phrase, 'consumer welfare' brings to mind the pursuit of what’s best for your average citizen or shopper, Bork’s tortured definition actually requires calculating and offsetting the benefits and harms to all market participants, not just those we colloquially think of as “consumers.” The result is a version of the antitrust laws that can excuse almost any merger or monopolization, so long as the benefits received by some market participants exceed the costs imposed on others—often a wealth transfer from the most economically vulnerable consumers to big businesses and their shareholders. This is absurd on its face, and conservatives should not hesitate to reject it as an insult to our intelligence. Instead, we should adopt consumer surplus, the net benefits to real consumers, as the definition of consumer welfare. […] The more accurate definition of consumer welfare as consumer or trading partner surplus offers the benefit of avoiding the need for political judgments or weighing benefits between two competing constituencies, while actually better serving antitrust’s political goals by putting consumers—people—before corporations."

With all that being considered, Meador sets out the main planks of what he believes conservative antitrust policy should be: economic analysis as "servant, not master"; a downgrading of efficiency as the paramount standard of antitrust law; skepticism of claims about "innovation"; more attention paid to "direct effects" to "determine monopoly power"; reexamining case law; and finally, pursuing legislative reform.

Whether you agree or disagree with this "new right" approach to antitrust, this text is certainly fascinating and well worth your time.

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