Neo-Brandeisian and Law and Political Economy (LPE) folks tend to emphasize the political consequences of concentrated economic power as a motivation for stricter antitrust enforcement. The basic idea is that excessive economic power might be problematic on account of its effects on the political process and democracy.
In The Antitrust Paradigm: Restoring a Competitive Economy, Baker (2019) argues against introducing noneconomic goals into antitrust. This includes political considerations as well as other types of noneconomic goals including protecting things like: consumer choice, equal economic opportunity, diversity of voices, local communities, democratic decision making, jobs, entrepreneurial opportunities, and low concentration (per se).
What is Baker’s case for excluding these kinds of noneconomic considerations from antitrust reform?
First, Baker thinks we can make a strong case for strengthened antitrust on purely economic grounds, and so there is little need to appeal to other political or social considerations to justify stronger enforcement. This case is appealing to me and seems to have growing support in business and economics fields, but is a bigger point, so I will just grant it for now.
Second, Baker thinks that there are real costs to (re)asserting the role of social and political goals in antitrust. His main point here seems to be that introducing noneconomic goals will lead to some antitrust conclusions that are non-optimal in economic terms. This is undoubtedly true (almost by definition), but seems to essentially beg the question philosophically if its going to be conclusive. The whole debate is about whether economic outcomes should be the most important consideration; so the fact that introducing non-economic considerations will yield non-optimal economic outcomes is only conclusive insofar as I already agree that economic considerations are the most important thing. Perhaps a weaker form of Baker’s position is just that there may be some tradeoffs between the economic and noneconomic values in practice. This seems plausible, though I am curious to think more about whether it is really true in practice. Are LPE folks and reformist economist types really ever misaligned when it comes to practical recommendations? If so, where exactly? This seems fruitful to think more about.
Third, Baker raises practical concerns about how a more politicized antitrust would work in practice. For example, he writes: “By what metric do we identify firms with too much political power, as distinct from economic power? Is political power indicated by aggregate revenue? Employment? Investment? … These are thorny questions more likely to inspire rancor and division than reform” (60-61). I suppose I take the point that there are details to nail down here; but the lack of an obvious existing standard doesn’t demonstrate to me that it’s impossible to develop one. Baker’s argument here essentially boils down to the standard case for moderation: that the path is clearer and more likely to “work” given the existing system. I guess that might be true (though it’s pretty tough to actually evaluate); however, it’s certainly a very practical political argument and doesn’t say much about the substance of the case being made. I also worry that this type of argument can be self-fulfilling, especially when made by powerful/influential moderates.
Finally, Baker seems to think that introducing noneconomic considerations in antitrust also risks introducing direct “political” considerations into antitrust decisions – i.e. antitrust decisions based on the identity of the specific actors vs. based on some coherent underlying ideology. Baker’s discussion of politics vs. ideology is nuanced, so this is something I want to think more about. I guess my basic intuition here is that I agree that there is a risk in politicizing antitrust in Baker’s sense, but I am not sure I am convinced that introducing noneconomic considerations in antitrust–properly formulated–necessarily risks this.
Instead of integrating noneconomic considerations into antitrust, Baker thinks we should retain an economic focus in antitrust law and complement this with non-antitrust regulatory approaches to address other social goals (e.g. campaign finance reform to address the effect of corporate power in politics).
Baker, J. B. (2019). The Antitrust Paradigm: Restoring a Competitive Economy. Harvard University Press.