Second, if antitrust is a political arena, the capture theory suggests it is an undemocratic one. If antitrust is captured by business interests, particularly through their influence on courts, the least democratic branch of government, then the democratic legitimacy of antitrust law, rules, and enforcement policy is called into question.
Third, if antitrust is captured by business interests, antitrust rules and decisions cannot be justified as largely the product of value-neutral and academically oriented economic analysis and arguments. Rather, in business capture theory, the economic analysis and arguments accepted by policymakers are an intellectual superstructure largely exploited, and often developed, to serve business interests. The implication: if economics does not provide a good guide for judges and enforcers, then it should be downplayed or ignored by antitrust institutions.
Fourth, if the levers of antitrust enforcement are controlled by big business and manipulated to benefit their interests, as the capture theory supposes, then enforcement creates a critical threat to democracy. If the economic power of big business controls the policy arena that we look to for protection of the public interest against special interests, big business can exploit its political power to undermine all of our democratic institutions. The big business capture theory suggests that, after decades in which the antitrust laws were weakened in the service of business interests, our democracy is at serious risk of being supplanted by an oligarchic system in which concentrated economic power and political power are self-reinforcing. This capture theory thus implies that the critical political threat to democracy today is from a big-business-led oligarchy, not from authoritarianism.
This essay explains why the big business capture theory is incomplete, and it challenges the antitrust policy lessons that the theory suggests. Part I surveys reasons for caution in accepting the capture theory. Part II describes an alternative “settlement” political economy theory involving an informal or tacit political settlement by which political competition among interest groups led to an antitrust policy that pursues inclusive economic growth.
While these two political economy theories differ, they each provide a way to criticize the conservative (Chicago School-oriented) approach that has framed antitrust law and policy since the 1980s. The criticism suggested by the big business capture theory is that the conservative approach results from business capture and has, by strengthening big business, entrenched that capture or facilitated its extension. The criticism suggested by the settlement theory is that the conservative approach is undermining inclusive growth.
Part II defends the settlement theory by explaining why it is attractive on both normative and positive grounds. Part III discusses lessons for antitrust policy of the alternative approach. The final Part provides a brief conclusion.
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