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American Gothic: How Chicago Economics Distorts `Consumer Welfare` in Antitrust

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  • Mark Glick

    (University of Utah)

Abstract

Since the publication of Robert Bork`s The Antitrust Paradox, lawyers, judges, and many economists have defended `Consumer welfare` (CW) as a standard for decisions about antitrust goals and enforcement priorities. This paper argues that the CW is actually an empty concept and is an inappropriate goal for antitrust. Welfare economists concede that there is no credible measurable link between price and output and human well-being. This means that the concept of CW does not legitimate limited antitrust enforcement, nor does it justify the exclusion of other antitrust goals that require more active enforcement practices. This paper contends that antitrust policy is not welfare based at all, and that if it were, antitrust policy and enforcement would differ significantly from the Chicago School vision. Without the fiction that economists can establish that in the short run lower price and higher output measurably increases welfare more than other goals, recent defenses of the CW standard resolve down to arguments based on unsupported assumptions.

Suggested Citation

  • Mark Glick, 2019. "American Gothic: How Chicago Economics Distorts `Consumer Welfare` in Antitrust," Working Papers Series 99, Institute for New Economic Thinking.
    • Handle: RePEc:thk:wpaper:99
    DOI: 10.36687/inetwp99
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    File URL: https://doi.org/10.36687/inetwp99
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    More about this item

    Keywords

    U.S. Consumer Welfare; Goal of Antitrust Law; New Brandeis School; Chicago School of Economics.;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-

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