The Anti-Trust Juggernaut Crushes the Little Guy

The Justice Department's Antitrust Division and the Federal Trade Commision were each bringing about 100 cases per year back then; now, they pursue a couple of dozen. Can we safely assume that corporate America has suddenly cleaned up its act and stopped engaging in anticompetitive practices? Not likely.

So what has happened? The cases aren't being filed for a very good reason: the injured plaintiffs (and their lawyers) know they simply can't win.

Why can't a business enterprise that's been destroyed by an antitrust violation win its case in 1997? Put bluntly, the crushed entrepreneur can't win because the corporate bully is shielded by a phalanx of recent Supreme Court decisions. No matter what facts he is able to prove, they won't be enough to withstand the "economic" tests or standards laid down in these opinions.

Predatory (below-cost) pricing to kill a competitor? Perfectly legal, says the Court. A new merger creates a duopoly (a choice of only two suppliers) in a major industry? No problem, says the Court; prices won't rise. Discriminatory prices that give retail giants (e.g., Wal-Mart) the ability to sell for less than their smaller competitors PAY their common supplier? Competition, says the Court, will not be hurt. Restrictive contracts with suppliers and customers that bar competitors and potential entrants from the most lucrative markets? Way to go, says the Court; the fewer the firms, the more "efficient" U.S. industry will be.

With the acceptance of that latter principle -- that Soviet-style "gigantomania" is the key to economic "efficiency" -- all the business practices of our 19th Century robber barons are automatically legalized (with the possible exception of the elder Rockefeller's dynamiting of a competing oil refiner off a bluff in Buffalo).

If the widget industry has 20 competing firms, and our 1,000 federal judges "know" that eliminating all but one or two of them will make costs (and thus consumer prices) fall, why be squeamish about the means used to get to that economically-optimal goal? Let the biggest buy up or crush the small and get it over with as quickly as possible.

Instead, our highest Court, in its role as the protector of "property" in America, now simply refuses to permit their enforcement. Its nine justices have made themselves the nation's "economists," adopting the so-called Chicago school of economic theory that favors the "consolidation" of U.S. industry -- and the enhanced "stockholder value" that comes with predatory and monopolistic pricing.

One of the ironies that emerged as I compiled a list of Supreme Court decisions that have killed U.S. antitrust enforcement, is that some of the worst offenders have been the most "liberal" of the individual justices, e.g., Brennan and Marshall. They apparently had no difficulty at all in swallowing the theory -- promoted at the University of Chicago school of economics -- that the biggest corporation is the most efficient.

The Supreme Court cases that are now giving the country a rerun of of The Octopus are embossed in gold leaf and carried in the briefcase of every corporate lawyer in America who has a Bill Gates for a boss, and together they form a legal blueprint for monopolizing an American industry. They are:

Through this group of decisions, the U.S. Supreme Court has, with no authorization from Congress, changed the country's basic economic policy -- which prior to 1975 had favored unconcentrated industries and competitive prices -- and are now reshaping the American economy into a group of two-firm and even one-firm industries -- the kind that from antiquity to the present have led only to bloat, inflated prices, vast disparities of income and wealth and, in the words of Adam Smith, the unjust "oppression of the poor."