Meese on Bork (and the AALS)
William & Mary’s Alan Meese has posted a terrific tribute to Robert Bork, who passed away this week. Most of the major obituaries, Alan observes, have largely ignored the key role
Bork played in rationalizing antitrust, a body of law that veered sharply off course in the middle of the last century. Indeed, Bork began his 1978 book, The Antitrust Paradox, by comparing the then-prevailing antitrust regime to the sheriff of a frontier town: “He did not sift the evidence, distinguish between suspects, and solve crimes, but merely walked the main street and every so often pistol-whipped a few people.” Bork went on to explain how antitrust, if focused on consumer welfare (which equated with allocative efficiency), could be reconceived in a coherent fashion.
It is difficult to overstate the significance of Bork’s book and his earlier writings on which it was based. Chastened by Bork’s observations, the Supreme Court began correcting its antitrust mistakes in the mid-1970s. The trend began with the 1977 Sylvania decision, which overruled a precedent making it per se illegal for manufacturers to restrict the territories in which their dealers could operate. (Manufacturers seeking to enhance sales of their brand may wish to give dealers exclusive sales territories to protect them against “free-riding” on their demand-enhancing customer services; pre-Sylvania precedent made it hard for manufacturers to do this.) Sylvania was followed by:
- Professional Engineers (1978), which helpfully clarified that antitrust’s theretofore unwieldy “Rule of Reason” must be focused exclusively on competition;
- Broadcast Music, Inc. (1979), which held that competitors’ price-tampering arrangements that reduce costs and enhance output may be legal;
- NCAA (1984), which recognized that trade restraints among competitors may be necessary to create new products and services and thereby made it easier for competitors to enter into output-enhancing joint ventures;
- Khan (1997), which abolished the ludicrous per se rule against maximum resale price maintenance;
- Trinko (2004), which recognized that some monopoly pricing may aid consumers in the long run (by enhancing the incentive to innovate) and narrowly circumscribed the situations in which a firm has a duty to assist its rivals; and
- Leegin (2007), which overruled a 96 year-old precedent declaring minimum resale price maintenance–a practice with numerous potential procompetitive benefits–to be per se illegal.
Bork’s fingerprints are all over these decisions. Alan’s terrific post discusses several of them and provides further detail on Bork’s influence.
And while you’re checking out Alan’s Bork tribute, take a look at his recent post discussing my musings on the AALS hiring cartel. Alan observes that AALS’s collusive tendencies reach beyond the lateral hiring context. Who’d have guessed?
Filed under: antitrust, cartels, law and economics, legal scholarship, markets, monopolization, regulation, resale price maintenance, Supreme Court