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

Mark Glick (glick@economics.utah.edu)
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Mark Glick: University of Utah

No 99, Working Papers Series from Institute for New Economic Thinking

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.

Keywords: U.S. Consumer Welfare; Goal of Antitrust Law; New Brandeis School; Chicago School of Economics. (search for similar items in EconPapers)
JEL-codes: K21 L40 N12 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2019-07
New Economics Papers: this item is included in nep-com, nep-his, nep-hme, nep-hpe, nep-law and nep-pke
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Persistent link: https://EconPapers.repec.org/RePEc:thk:wpaper:99

DOI: 10.36687/inetwp99

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