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Robert Bork and anti-trust law scholarly article

Robert Bork and anti-trust law scholarly article

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Published by Chad Whitehead
Robert Bork and his position on anti-trust law
Robert Bork and his position on anti-trust law

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Published by: Chad Whitehead on Jan 14, 2013
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12/11/2013

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JUDGE BORK, CONSUMER WELFARE,
AND
ANTITRUST
LAW
DOUGLAS H. GINSBURG*
The Sherman Antitrust
Act of 1890
broadly prohibits
con-
tracts, combinations,
and
conspiracies
in
"restraint
of
trade"and makes
it
unlawful
"to
monopolize"
any
line
of
commerce.^The open-textured nature
of the Act
vests
the
judiciary withconsiderable responsibility
for
interpretation.
In a 1966
articlepublished
in the
Journal
of
Law
and
Economics,
then-ProfessorRobert
H.
Bork examined
the
legislative history
of the Act.^
Bork
was
candid about
the
"difficulties inherent
in the
veryconcept"
of
legislative intent.^ Nevertheless, Bork thought
the
undertaking was justified
by the
need
to
counter
the
judiciary'srepeated invocation
of
values that were unrelated
to the
debatethat
had
informed congressional enactment
of the
Sherman
Act
and, lacking
any
legitimate economic rationale, were likely
to
produce real economic harm.
For example,
in
Fashion Originators' Guild
of
America
v.
FTC,^
the Supreme Court
had
counted among
the
policies underlyingthe Sherman
Act
protection
of "the
freedom
of
action
of
[Guild]members
[not] to
reveal
to the
Guild
the
intimate details
of
their individual affairs. "^
No
lesser light than Judge LearnedHand
had
asserted that
the
Congress intended
the
Sherman
* Circuit Judge, United States Court
of
Appeals
for the
District
of
Columbia CircuitThese remarks were excerpted from
the
Author's introduction
to
Judge Bork's1966 article.
Legislative Intent and
the
Policy ofthe Sherman
Act,
as
republished
in the
Spring 2006 issue
of
Competition Policy International.
See
Douglas
H
Ginsburg,
An
Introduction to Bork
(1966),
2
COMPETITION
POL'Y
iNrL
225 (2006)
1.
See 15 U.S.C
§§1-2
(2000).
2.
See Robert
H.
Bork,
Legislative Intent
and the
Policy ofthe Sherman Act
9]L
&
ECON.
7
(1966).
'
^'"^'^
3.
Id.
at 7
n.2. Bork's caveat
is an
important one. After
all, "[i]t is the
law
thatgoverns,
not the
intent
of the
lawgiver." ANTONIN SCALIA,
A
MATTER
OF
INTER-
PRETATION:
FEDERAL COURTS AND THE LAW
17 (Amy
Gutmann
ed 1997)
4.
312
U.S.
457 (1941).
5.
Id.
at
465.
 
450
Harvard Journal of Law & Public Policy
[Vol. 31Act to achieve certain sociopolitical aims, such as minimizingthe "helplessness of the individual"^ and ensuring the "organi-zation of industry in small units.''^ Obviously, such policies arehighly malleable; they can be invoked (or not) to justify almostany result in any situation. Indeed, as Bork pointed out. JudgeHand went so far as to state that in enacting the Sherman Act,the Congress had "delegated to the courts the duty of fixing thestandard for each case."^Bork's examination of the text and structure of the ShermanAct against the background of preliminary proposals and draftlegislation, statements by Senators and Representatives, andcontemporaneous understandings of constitutional and com-mon law led him to conclude: "The legislative history ... con-tains no colorable support for application by courts of anyvalue premise or policy other than ¿he maximization of consumerwelfare."^ By "consumer welfare," Bork meant "the maximizationof wealfh or consumer want satisfaction,"^» known today as allo-cative efficiency—a concept he thought the framers of theSherman Act clearly grasped even though they did not"speak... with the precision of a modem economist."" Bork alsoexplained that maximization of consumer welfare is the commondenominator underlying the central prohibitions of the Act,that is, the condemnation of cartel agreements, monopolisticmergers, and predatory business practices.^^ He explained thatlegislators used the term "monopolize" to refer only to thosethree prohibited activities, as opposed to a "monopoly," whichmight arise from superior efficiency." According to Bork,"[o]nly a consumer-welfare value which, in cases of conflict,sweeps all other values before it can account for Congress' will-ingness to permit efficiency-based monopoly."'^
6. United States v. Aluminum Co. of Am., 148 F.2d 416, 428 (2d Cir. 1945).
7.
Id.
at 429.8. United States v. Associated Press, 52 F. Supp. 362, 370 (S.D.N.Y. 1943),
afd,
326 U.S. 1 (1945).9. Bork,
supra
note
2,
at 10.
10.
Id.
at 7.
11. W.
at 10.
12.
Id.
at 11-12, 21-26.
13.
See id.
at 12,
26-31.
14.
Id.
at 12.
 
No.
2]
Bork,
Consumer
Welfare,
and
Antitrust
451When Bork's article was first published in 1966, his thesiswas novel; by 1977, it had become the conventional wisdom ofthe federal courts. That year, the Supreme Court, in
Continental
T. V., Inc.
V.
GTE
Sylvania
Inc.,^^
repudiated the position it hadtaken only 10 years before in
United States
v.
Arnold,
Schwinn &
Co.^^
In the earlier case, the Court had held that a nonprice ver-tical restraint imposed by a manufacturer on a distributor after"title, dominion, or risk" had passed was a
per se
violation ofthe Sherman Act,i'' that is, regardless of its actual—and possi-bly efficient—economic effect.
In
GTE Sylvania
Inc.
v. Continental T V.,
Inc.,^^
a
retailer of televi-
sions claimed that a manufacturer's limitation upon the locationsat which the retailer could sell its televisions was a
per se
violationof the Sherman Act." The Ninth Circuit expressly adopted Bork'sthesis and rejected the multiplicity of "values" the Supreme Courthad been reading into the Sherman Act for decades.The Supreme Court affirmed, holding that
"[p]er
se
rules ofillegality are appropriate only when they relate to conduct thatis manifestly anticompetitive,"^' and stating, "[vjertical restric-tions promote interbrand competition by allowing the manu-facturer to achieve certain efficiencies in the distribution of hisproducts."22 In emphasizing allocative efficiency over othervalues, the Supreme Court implicitly endorsed Bork's thesis.Indeed, in his concurring opinion. Justice White attributed tothe Court the view that the Sherman Act is "directed solely toeconomic efficiency," citing Bork's article as the source of thatproposition.23The significance of the Court's new, Borkean position shouldnot be underestimated. As Professor Timothy Muris has said.
15.
433
U.S.
36 (1977).
16.
388
U.S.
365 (1967).
17.
Id.
at 379.
18.
537 F.2d 980 (9th Cir. 1976) (en bane).
19.
Id.
at 1000.
20.
See
id.
at 1003 (citing Bork,
supra
note
2,
at 7,11).
21.
GTE Sylvania Inc.,
433 U.S. at 49-50.
22.
Id.
at 54.
23.
Id.
at 69 (White, J., concurring) (citing Bork,
supra
note
2,
at 7).

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