One of the reasons for the enactment of the antitrust laws was to safeguard political freedom by preventing the formation of large corporations powerful enough to control the government. Taft, in his book The Anti-Trust Act and the Supreme Court (written in 1914, after his presidency but before he joined the Supreme Court), said the Sherman Act had attacked methods of "suppressing competition and controlling prices" which "had resulted in the building of great and powerful corporations which had, many of them, intervened in politics and through use of corrupt machines and bosses threatened us with a plutocracy" (p. 4).
Does anyone know of an economicsy, perhaps public-choicey, treatment of the same point, where antitrust emerges as a second-best optimum to prevent corruption or excessive corporate political influence?
It's actually not clear that a trust is the best way to increase an industry's political influence. An industry with 1000 small firms often has more power than one with 1 big firm. A large part oft his has to do with geographic dispersion.
NB: I had to delete a link to Amazon to post this.
Well, with respect to corruption, how about the criminal laws against bribery, influence peddling etc., and prosecutions conducted using those laws.
And with respect to "excessive corporate political influence", we have MeCain Feingold.
In the second place, criminal laws against bribery, or McCain-Feingold, have nothing to do with antitrust -- they're designed to prevent influence-peddling by anyone, even if they're vigorously competing, have a small market share, and are acting fully consistently with the antitrust laws. I was looking for an argument that antitrust is a good idea, in part because the large corporations that it would break up are an especially great threat to democracy.
But, as it happens, I've found such a source myself: Lester M. Salamon &John J. Siegfried, Economic Power and Political Influence: The Impact of Industry Structure on Public Policy, 71 Am. Pol. Sci. Rev. 1026, 1039 (1977) (suggesting "an empirical base for the argument that antitrust policy is necessary to avoid not just undue concentrations of economic power but also threatening concentrations of political power").
In any event, I am not really directly answering your question, but I did see a very wrongly decided antitrust case recently out of the 11th Circuit, Aug. 2, 2006 decision JES Properties (Cypress Trails Farm) v. United States Equestrian Federation. The 11th Cir. held the Amateur Sports Act (ASA) created an immunity from enforcing the Sherman Act against the USEF (and several other Florida horse show managers) as a monopoly, the reason being implied repeal by the sports act upon the Sherman Act (one federal statute repealing the other=the implied immunity from antitust liability).
Really however, this was a factually and legally wrong decision, because there are numerous disabled competitors and many whom are not amateurs but rather professionals who are harmed by the challened mileage rule (explained below). The disabled crowd are protected from "lesser" recreational, transportation, and work opportunities by the Americans With Disabilities Act and/or Rehabilitiation Act of 1973, Sec. 504. I am a disabled person who has ridden at Cypress Trails, and train and show horses as a professional (when I am not law clerking or pursing my legendary assistive technology disability bar admission civil rights struggle), and I know my rights as a participant at Cypress Trails horse shows were not considered by the 11th Cir. in this lawsuit. The amateurs who show at all of the horse shows incolved in the lawsuit are only appx. 1/20th of the competitors affected by the mileage rule.
The United States Olympic Committee selected the USEF as the National Governing Body for the equestrian sport. The USEF had this 250 mile rule, called the mileage rule, that prohibited there being A-rated horse shows closer than 250 miles apart on the same weekend. The problem for Tampa was show managers in Wellington and Ocala got (and hogged up) certain A-rated show dates during the nice weather winter months (11 consecutive weeks, early Jan.-end of Mar.) when the profitable Winter Equestrian Festival comes to Florida. Once dates are given, these show managers can keep the same dates practically forever, shutting any other newcomer competitor show managers less than 250 miles from Wellington and Ocala (e.g., the entire Tampa area). The Wellington and Ocala show managers got the coveted winter months dates decades ago, before the Tampa area became a major population center in Florida.
The effect of this has been to keep all the AA- &A-rated horse shows in Florida during the nice weather winter months down in Wellington or up in Ocala, and the entire Tampa Bay area is completely shut out of having any of these shows that count the highest levels of points toward qualifying for National awards, thereby causing a lot of harm to the equestrian industry in the Tampa area by limiting the number of show stables, number of horse sales, etc. and shifting all economic activity to Wellington and Ocala, forcing disabled people living in Tampa area to have to travel 6-8 hours to Wellington or 4-6 hours to Ocala every weekend that they would want to show at an A-rated show. This is extremely expensive, considering shipping horses, people, buying horse show stalls, hotels for the people, and eating out vs. simply trailering and driving around the Tampa area and eating and staying at home.
The 11th Cir wrongly decided the case as a matter of law by failing to apply the ADA and RA in the 'what federal statutes repeal the other' equation, and factually by failing to consider that not every person harmed by the mileage rule is an amateur. The ADA contains an express "preemption" provision (42 U.S.C. Sec. 12201(b), that, as the 11th Cir. characterized it in Shotz v. City of Plantation, Fla (2003), is a "vertical and horizontal" preemption provision, "preempting" conflicting State laws and "other federal laws." The ADA incorporates the rights, remedies, and procedures of Sec. 504 of the RA. Professional and junior (under 18 years of age)disabled riders were considered by the 11th Cir. to be subject to the ASA, even though they do not meet the dfinition of amateur, yet participated in these Florida shows and were harmed by the anticompetive monopolistic mileage rule.
It would seem, in this situation, the ADA containing as it does an express repeal provision vs. the amateur sports act only "impliedly" repealing (and only applying to the 1/20th show participants who are amateurs), that by excluding or burdening the disabled professional and junior riders who go to horse shows by the mileage rule, the ADA and Sherman Act should have been read in harmony and the ADA should have expressly repealed the Amateur Sports Act; thus no immunity from enforcing a Sherman Act monopoly upon the USEF.
But, then again, this is not the first time the 11th Cir. (deep South) has been unfriendly toward the ADA. (e.g., Goodman v. Georgia).
I don't know if this case helps with respect to the excessive corporate political influence issue.
Eric Rasmusen: Incidentally, the Salamon &Siegfried article I cite above mentions the geographic dispersion point you allude to.
All: Even though I've found a source, feel free to chime in with more if you know of any!
(2) You are correct. You are not really directly answering my question.
You said:
not
I might observe that antitrust laws relate to commercial enterprise and economic concertration, otherwise known as interstate commerce, and have nothing in particular to do with bribery and public corruption. The criminal and campaign finance laws, on the other hand, do have something to do in particular with bribery and corruption. In fact, that is their primary purpose. As their primary purpose is to have something to do with bribery and corruption, and the antitrust laws only affect those things, if at all, secondarily or incidentally,
Judging from your summary:
it appears you did not state very well what you were actually looking for.
It appears that what you were actually looking for was an empirical study of some sort that shows that antitrust law has an important yet secondary if not incidental effect on bribery and public corruption.
The existence of laws that are actually aimed at corruption isn't relevant to that question. When you said "the antitrust laws only affect those things, if at all, secondarily or incidentally," you exactly sidestepped my central question with your "if at all": It's not clear that antitrust has this effect at all, so I wanted someone who affirmatively argued that it would have that effect.
I wasn't looking for any study showing that antitrust law actually has an effect on bribery or public corruption. All I was looking for is an article where someone makes the argument that it might have such an effect. The paper I found does indeed make that argument. It would be just as good, for my purposes, if the empirics were totally wrong, or even if it totally lacked any empirics but just made the claim. But what's key is that it makes the claim.
?
Somebody making an argument is just somebody making an argument. Lawyers can make arguments to rationalize just about anything, and if empirical evidence doesn't matter to you just that the argument was made---if you don't mind my saying so, this seems kind of silly.
What exactly are you trying to achieve? Win a beer bet with someone?
This isn't what you asked, but it might be interesting. Vernor Vinge, most recently in his Collected Stories book, imagined an anarchy based on (or at least reliant upon) antitrust rules.I can't recall the story name at the moment, and don't have the book at hand. I think the story was titled something like "Rule By Default".
Vernor Vinge's antitrust story "Conquest By Default" is also in his collection "Threats and Other Promises". From his forward:
SA, if this is what you're after, why are you limiting it to antitrust? Title II of he ADA can be used in this way, e.g., again, read facts at issue in Shotz v. City of Plantation, Fla, (11th Cir. 2003). There have been several occasions where my husband has rewritten other lawyers' unsuccessful motions in which they previously alleged corruption, recasting them in one form of discrimination or another successfully.
But if you are limited to antitrust, well, there are lots of exemptions and immunities, e.g., no antitrust action against Bar associations. Title II of hte ADA has no such exemptions. Just my observation.
My paper relates to how fragmenting an industry (in this case, dividing it into different sectors by opening it up to privatization, and dividing the sector among different firms) can reduce the amount of lobbying for policy changes that would increase industry profits. Because my argument specifically relates to fragmenting an industry, it has obvious parallels with arguments that antitrust enforcement reduces the lobbying of the broken-up industry, i.e. antitrust reduces the political influence of the industry. (That's why, by the way, in response to Mary Katherine Day-Petrano, the ADA isn't quite right for my purposes.)
Now there are various reasons why the antitrust version of the argument might not be right -- for instance, antitrust enforcement increases lobbying to control the antitrust enforcement mechanisms, including to use them against one's competitors, etc. But, like I said, my argument only has the same flavor as the antitrust argument, so I just want to drop a footnote to that effect.
]My paper relates to how fragmenting an industry (in this case, dividing it into different sectors by opening it up to privatization, and dividing the sector among different firms) can reduce the amount of lobbying for policy changes that would increase industry profits.
As I said, lawyers can rationalize anything.
You might wish to look at the actual antitrust law relating to trade associations and their permitted activities in terms of lobbying to get favorable legal, tax, and regulatory treatment. And to the effects of trade associations in DC.
If you do that empirical thing, you might find that fragmenting a particular industry into many businesses, none of which have significant HHIs does not lessen their capability of collective lobbying for their common good, both individually and collectively through the trade association.
In any event, though lawyers can rationalize anything, that doesn't mean they've gotten around to it yet. I was looking for cases where they had in fact gotten around to making that argument, whether correctly or not. Thanks!
Lev's mention of McCain-Feingold actually may point in a productive direction. The libertarian arguments against campaign finance regulation point to limited government as the solution to influence peddling and corruption, rather than regulation, since people (or corporations) are only motivated to 'buy' elected officials if those officials are sufficiently empowered to interfere to their patrons' benefit. If the government can't interfere in commerce enough to benefit a corporation, then there is no reason for that corporation to attempt influencing government. It seems similar reasoning would hold limiting government as superior to fragmenting industries as a means of avoiding their 'buying' government by removing the motive, rather than the means. Thus, perhaps someone, in the course of opposing campaign finance reform from a libertarian standpoint, has presented the arguments you seek.