Giocoli, Nicola (2012): British economists on competition policy (1890-1920).
Download (303Kb) | Preview
Most late 19th-century US economists gave a rather cool welcome to the Sherman Act (1890) and, though less harshly, to the Clayton and FTC Acts (1914). A large literature has identified several explanations for this surprising attitude, calling into play the relation between big business and competition, a non-neoclassical notion of competition and a weak understanding of anti-competitive practices. Much less investigated is the reaction of British economists to the passing of antitrust statutes in the U.S. What we know is simply that none of them (including the top dog, Alfred Marshall) championed the adoption of a law-based competition policy during the three decades (1890-1920) of most intense antitrust debates in the U.S. The position of three prominent British economists will be examined in this paper: H.S. Foxwell, D.H. MacGregor, and, of course, Alfred Marshall – the latter in two moments at the extremes of our period, 1890 and 1919. It will turn out that they all shared with their American colleagues a theoretical and operational skepticism about the government and judiciary interference with the free working of markets. They also believed that British industrial structure and business habits were so different from those in the U.S. that the urge of interfering with markets in order to preserve competition was much weaker. Among the paper's insights is that Marshall’s key concept of “defending a competitor’s right to compete” foreran the modern characterization of the goal of competition policy as "the protection of the competitive process". Yet Marshall developed his concept without making recourse to the post-1930s neoclassical notion of competition as a static market structure which lies at the foundation of most contemporary antitrust policy: a useful lesson from the history of economic thought for those IO economists who still claim that the classical dynamic view of competition is unsuited as a foundation for an effective competition policy.
|Item Type:||MPRA Paper|
|Original Title:||British economists on competition policy (1890-1920)|
|Keywords:||British economists; antitrust law; Sherman Act; Alfred Marshall|
|Subjects:||B - History of Economic Thought, Methodology, and Heterodox Approaches > B2 - History of Economic Thought since 1925 > B21 - Microeconomics
B - History of Economic Thought, Methodology, and Heterodox Approaches > B3 - History of Economic Thought: Individuals > B31 - Individuals
K - Law and Economics > K2 - Regulation and Business Law > K21 - Antitrust Law
L - Industrial Organization > L4 - Antitrust Issues and Policies > L40 - General
|Depositing User:||Nicola Giocoli|
|Date Deposited:||05. Jun 2012 15:11|
|Last Modified:||13. Feb 2013 00:31|
Backhouse R.E. 1991, “Competition”, in Creedy J. (ed.), Foundations of Economic Thought, Basil Blackwell, London, 58-86.
Chandler A.D. Jr. 1977, The Visible Hand. The Managerial Revolution in American Business, CUP, Cambridge Mass.
Clark J.B. 1886, The Philosophy of Wealth, Macmillan, New York.
Clark J.B. 1901, The Control of Trusts, Macmillan, New York.
Clark J.B. 1904, The Problem of Monopoly, Macmillan, New York.
Clark J.B. 1907, Essentials of Economic Theory, Macmillan, New York.
Clark J.B. & Clark J.M. 1912, The Control of Trusts, Macmillan, New York.
Crafts N. 2011, “British relative economic decline revisited”, CEPR Discussion Paper, n.8384.
DiLorenzo T.J. & High J.C 1988, “Antitrust and competition historically considered”, Economic Inquiry, 26 (3), 423-435.
Ely R.T. 1888, Problems of To-day, Crowell, New York.
Fisher I. 1997 , Elementary Principles of Economics, in Barber W.J. (ed.), The Works of Irving Fisher, Vol.5, Pickering & Chatto, London.
Foxwell H.S. 1917, “The nature of the industrial struggle”, Economic Journal, 27 (107), 315-329.
Foxwell H.S. 1919 , “The growth of monopoly and its bearing on the functioning of the State”, in Papers on Current Finance, Macmillan, London, 263-277.
Freyer T. 1992, Regulating Big Business. Antitrust in Great Britain and America 1880-1990, CUP, Cambridge.
Gunton G. 1888, “The economic and social aspect of trusts”, Political Science Quarterly, 3 (3), 385-408.
Hadley A.T. 1885, Railroad Transportation: Its History and Its Laws, Putnam’s Sons, New York.
Hadley A.T. 1886, “How far have modern improvements in production and transportation changed the principle that men should be left free to make their own bargain? Part I”, Science, 7 (161), 221-225.
Hadley A.T. 1896, Economics: An Account of the Relations between Private Property and Public Welfare, Putnam’s Sons, New York.
Jones E. 1919, “Report of the Committee on Trusts of the British Ministry of Reconstruction”, American Economic Review, 9 (4), 890-892.
Kerstenetzky J. 2010, “Alfred Marshall on big business”, Cambridge Journal of Economics, 34, 569-586.
Koot G.M. 1977, “H.S. Foxwell and English Historical Economics”, Journal of Economic Issues, 11 (3), 561-586.
Lee F.S. 2008, “David H. MacGregor and the Marshallian tradition at Oxford, 1920-1945”, paper presented at the conference “Marshall and Marshallians on Industrial Economics”, Hitotsubashi University, 15-16 March 2008.
MacGregor D.H. 1996 , Industrial Combination, Routledge, London.
Machovec F.M. 1995, Perfect Competition and the Transformation of Economics, Routledge, London.
Macrosty H.W. 2001 , The Trust Movement in British Industry, Batoche Books, Kitchener.
Marshall A. 1890, “Some aspects of competition”, Journal of the Royal Statistical Society, 53 (4), 612-643.
Marshall A. 1919, Industry and Trade, 3rd edn. (1920), 2 volumes, Signalman Publishing, FL.
Marshall A. 1961 , Principles of Economics, 9th (variorum) edition, MacMillan, London.
McNulty P.J. 1967, “A note on the history of perfect competition”, Journal of Political Economy, 75 (4), 395-399.
McNulty P.J. 1968, “Economic theory and the meaning of competition”, Quarterly Journal of Economics, 82 (4), 639-656.
Medema S. 2011, The Hesitant Hand. Taming Self-Interest in the History of Economic Ideas, Princeton UP.
Mercer H. 1995, Constructing a Competitive Order. The Hidden History of British Antitrust Policies, CUP, Cambridge.
Morgan M. 1993, “Competing notions of competition”, History of Political Economy, 25 (4) 563-604.
Parrini C.P. & Sklar M.J. 1983, “New thinking about the market, 1896-1904: some American economists on investment and the theory of surplus capital”, Journal of Economic History, 43 (3), 559-578.
Perelman M. 2006, Railroading Economics. The Creation of the Free Market Mythology, Monthly Review Press, New York.
Peterson S. 1957, “Antitrust and the classic model”, American Economic Review, 47 (1), 60-78.
Salvadori N. & Signorino R. 2011, “Competition”, mimeo. Scott Morton F. 1997, “Entry and predation: British shipping cartels 1879-1929”, Journal of Economics and Management Strategy, 6 (4), 679-724.
Seligman E.R.A. 1909, Principles of Economics, Longmans, New York.
Stigler G.J. 1982, “The economists and the problem of monopoly”, American Economic Review, Papers and Proceedings, 72 (2), 1-11.
Williams P.L. 1990, “The attitudes of the economics profession in Britain and the United States to the trust movement, 1890-1914”, in Hey J.D. & Winch D. (eds.), A Century of Economics, Basil Blackwell, London.