Economics of Social Issues
Instructor: Doug Laher
Should we abolish antitrust laws in the U.S.?
Antitrust laws are the legal arm of protectionism in America. The laws are enforced by the Antitrust Division of the United States Department of Justice and have been in their present form since Senator John Sherman proposed the inception of the Sherman Antitrust Act in 1890. Prior to its enactment, various states had passed similar laws, however they were limited to interstate business. The Sherman Act was “based on the constitutional power of Congress to regulate interstate commerce, declared illegal every contract, combination, or conspiracy in restraint of interstate and foreign trade” (Infoplease.com, 2006). The act set the stage for many antitrust lawsuits in its 116 year history, and is still used today. Because most states do not report how many antitrust investigation they undertake, it’s difficult to pinpoint the actual total amount of antitrust lawsuit cases. According to the Sourcebook of Criminal Justice Statistics there have been approximately 27,192 U.S Government cases filed in District Courts and approximately, 25,138 cases filed in Private cases (Source book of Criminal Justice Statistics, 2003). In 2001, the DOJ initiated 275 antitrust investigations and received notification for 2,376 mergers (U.S. Department of Justice Workload Statistics FY 1992-Fy 2001) A major problem with the Sherman act was “that businessmen did not know what was allowed or not” (Wilkipedia, 2006). Because of this confusion in the original act, the Clayton Act and the creation of the Federal Trade Commission occurred in 1914. The Clayton Act “was enacted to remedy perceived deficiencies in the Sherman Act. The Clayton Act prohibits: price discrimination between different purchasers if such discrimination substantially lessens competition or tends to create a monopoly in any line of commerce, sales on the condition that the...