A Historical Study of the Relationship between Economic Schools and Antitrust Law

Abstract

This paper delves into the evolution of antitrust thought, tracing its intellectual lineage through various schools of thought. Starting with the Harvard School in the early 20th century, the paper highlights its structuralist approach, which emphasized the role of market structure in fostering anti-competitive behaviors. The Harvard School’s SCP (Structure-Conduct-Performance) paradigm influenced U.S. antitrust enforcement, leading to the breakup of large corporations. The paper then shifts focus to the Chicago School, which emerged in the mid-20th century advocating for a behavioral approach centered on economic efficiency. The Chicago School’s opposition to extensive government intervention and its emphasis on market self-correction challenged the structuralist orthodoxy. The subsequent development of the Post-Chicago School introduced refinements, acknowledging the limitations of perfect competition and incorporating insights from game theory and transaction cost economics. Finally, the paper explores the emergence of the New Brandeisian School, which proposes a reevaluation of antitrust policy in the digital era, advocating for a broader focus on market structure and competitive processes while rejecting a return to the Harvard School’s strict structuralism. This paper contributes to the ongoing discourse on antitrust theory and its application in contemporary markets.