John Bates Clark on Trusts: New Light from the Columbia Archives
AbstractThe paper sheds new light on John Bates Clark’s mature position on the “trust” issue. Access to previously unpublished 1911 testimony before the Interstate Commerce Committee of the U.S. Senate, it is shown that, although Clark relied generally on competitive forces to keep monopoly power in check, following the Standard Oil and American Tobacco cases of that year, he lost considerable faith in the power of his concept of “potential competition,” or latent competition that may or may not be realized. What he advocates here is government promotion of actual competition, largely through the dissolution of the “perilous” trusts and the development of a common pricing policy where all producers face the same price regimes in both the output and input markets. What is desired as an outcome is the promotion of what Clark terms “tolerant competition.” Tolerant competition is not the perfect competition of the neoclassical model, nor the rough-andready competition of the pre-1870 era. Rather, it is a live-and-let-live form of competition where big firms and small firms face the same pricing conditions and only efficiency determines the profit outcome.
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Bibliographic InfoPaper provided by Department of Economics, University of Siena in its series Department of Economics University of Siena with number 462.
Date of creation: Sep 2005
Date of revision:
Find related papers by JEL classification:
- B13 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Neoclassical through 1925 (Austrian, Marshallian, Walrasian, Stockholm School)
- B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-10-22 (All new papers)
- NEP-COM-2005-10-22 (Industrial Competition)
- NEP-ENE-2005-10-22 (Energy Economics)
- NEP-HIS-2005-10-22 (Business, Economic & Financial History)
- NEP-HPE-2005-10-22 (History & Philosophy of Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jeremiah W. Jenks, 1912. "Economic Aspect of the Recent Decisions of the United States Supreme Court on Trusts," Journal of Political Economy, University of Chicago Press, vol. 20, pages 346.
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