What happened to the antitrust movement? This was the question asked by Richard Hofstadter in the mid-1960s. Antitrust, observed the historian, once was the subject of a progressive movement in the U.S. that stirred public agitation and imagination, despite few antitrust prosecutions. By the 1960s, there were many antitrust prosecutions (by both Democratic and Republican administrations), but without any antitrust movement. Fifty years later, the U.S. has neither an antitrust movement nor much enforcement. That needs to change.
To understand the current moment in antitrust and what should come next, let’s take a historical perspective. U.S. antitrust policy and enforcement have waxed and waned over four cycles:
1900–1920. After initial administrative neglect and judicial hostility, this era ushered in the promise of antitrust with the breakup of Standard Oil and the enactment of the Clayton and Federal Trade Commission Acts to prevent the formation of trusts and monopolies.
1920s–1930s. Antitrust activity was rare since administrations generally preferred industry-government cooperation (and, during the early New Deal, economic planning and industry codes of fair competition), over robust antitrust enforcement.
1940s–late-1970s. Antitrust came to represent the Magna Carta of free enterprise – it was seen as the key to preserving economic and political freedom.
Late-1970s–mid-2010s. Antitrust contracted under the Chicago and post-Chicago Schools’ neoclassical economic theories.
The Golden Era of Antitrust
Let’s consider the third cycle (1940s–late 1970s), in many ways the golden era of antitrust action. At the time, competition was seen largely as an antidote to fascism, and antitrust as the enabler of that competition. As Jeffry Frieden’s book Global Capitalism recounts, under the fascist economic order the government, directly or through state-owned holding companies, largely controlled the economy. As the fascist economic order spread throughout Europe and Middle East, and much of Asia and Africa during this cycle, the competition ideal was perceived to be under attack. The competition ideal was the belief, in line with democratic principles, in dispersing economic and political power from the hands of a few, to foster greater opportunities to compete, improve, and win. At one point during WWII, the U.S. and U.K. were its last major supporters.