Memes and Myths of Antitrust
Abstract
A meme is a useful cognitive device: it compresses complex information into a simple structure for easy transmission from person to person. But compression implies loss of detail and nuance. To put it another way, memes can be a substitute for careful inquiry. And, of course, even as they glide fluidly from mind to mind, memes can be flat-out wrong. In the field of antitrust, the most significant and most frequently encountered memes give credit to antitrust oversight—what the New Deal antitrust czar Thurman Arnold famously called “the policeman at the elbow”—for ensuring that large firms did not stand in the way of innovation. Careful historical inquiry suggests, by contrast, that most of these memes far overstate the positive value of antitrust scrutiny and far understate the importance of dynamic competition as the spur to innovation. History also suggests that even if antitrust scrutiny can be a good cop, it can also be a bad cop. In many cases, antitrust scrutiny has helped slow the rate of innovative activity and alter its direction in ways that were often the opposite of what was intended.