Hunting the Big Five: Twenty-First Century Antitrust in Historical Perspective

Chicago doctrine must be discarded because it creates a problem of elephant-in-the-room proportions for proponents of antitech antitrust, whom it forces to explain why consumers (or indeed society more broadly) are being harmed by an incomprehensibly magical information source offered at a price of zero; by cheap and swift access to virtually all the products of humanity at the touch of a finger; by elegant devices that concentrate in the palm of the hand abilities undreamed of even in science fiction; and in general by quality-adjusted prices that continue to plunge through the floor. At the state level, the united States after the American Revolution was highly regulated in ways that protected incumbent interests (Hughes 1977). Because of high transportation and transaction costs and to some extent because of the U.S. Constitution, the federal space was, however, far less regulated. Railroads were the first flashpoint. Because railroads were high-fixed-cost industries, they could not cover their total costs if they priced at marginal cost. The legislative collision of a railroad-oriented Senate bill with a shipper-oriented House bill resulted in the Interstate Commerce Commission in 1887, a train wreck that pleased no one.5 The political economy of the Sherman Antitrust Act of 1890 was similar to, if perhaps more complex than, what lay behind the interstate Commerce Act.