The Yale Law Journal

VOLUME
131
2021
NUMBER
1
October 2021
1-369

Recovering the Moral Economy Foundations of the Sherman Act

Antitrust Law

abstract. This Feature deepens and seeks to provide a foundation for the current broadening in the anti-trust debate and, ultimately, in adjacent areas relating to market organization. As normative reconstruction, it may help guide current reform efforts as well as the interpretation and implementation of the existing antitrust laws. The Feature traces a thread beginning with the “moral economy” origins of antitrust and the common law of restraint of trade; continues through the American antimonopoly coalition’s distinctive and egalitarian moral economy vision; and culminates in a reinterpretation of the legislative history of the Sherman Act, both as to affirmative purpose and as to judicial role. I propose a core prescription: the command to disperse economic coordination rights. This core prescription in turn implies three key tasks: taking affirmative steps to contain domination, to accommodate and promote democratic coordination, and to set rules of fair competition.

The normative thread traced here, culminating in an argument about legislative purpose, is interwoven with an argument about institutional roles. The widely held conventional wisdom is that the Sherman Act is the paradigmatic “common-law statute,” entailing a delegation of law-making power by Congress to the courts that spans the field of antitrust. The common-law-statute thesis is more than just the proposition that the courts should guide the application of the law as circumstances change. Instead, it has been understood as an effective “blank check” to federal courts to generate the foundational normative criteria according to which the statutory framework will function. But the legislative history of the Sherman Act undermines both the argument for judicial supremacy and the particular prescriptions with which the most pronounced, current episode of judicial lawmaking has been associated. Finally, the Feature briefly sketches the broad outlines of an alternative path for implementing antitrust’s core prescription, emphasizing the potential role of the Federal Trade Commission in administering the moral economy.

author. Assistant Professor of Law, Wayne State University. For their comments and insights, either on the draft or in related conversations, I am grateful to Ethan Leib, Blake Emerson, Jed Shugerman, James Brudney, Kathy Thelen, Luke Herrine, John Newman, Lina Khan, Jon Weinberg, Ryan Doerfler, Sandeep Vaheesan, Amy Kapczynski, Aditya Paul, Corinne Blalock, Alvin Klevorick, Steve Salop, Marshall Steinbaum, Nathan Tankus, and Ruchira Paul; and to Lead Editor Sam Hull and the other editors of the Yale Law Journal. I also thank participants in the East Coast Political Economy Colloquium and the LPE Project Conference, as well as audiences at Miami, Fordham, UC Irvine, and Florida. I thank all my colleagues in the LPE Project for ongoing conversations and support. Law librarians at Wayne State (particularly Jan Bissett), Minnesota, and Fordham contributed to this effort, as did the librarian in charge of the East Lothian Archives in Haddington, Scotland. Patrick Masterson, Daniel Backman, and Ann Sarnak provided superb research assistance.

Introduction

Antitrust law is at a crossroads.1 In recent years, a number of normative concerns—some of which dissenting voices have long pressed—have reentered the mainstream conversation: instantiating fair economic competition as a real-world process rather than a theoretical ideal;2 curbing vertical control3 as a mechanism of economic and market organization and replacing it with more horizontal forms of cooperation;4 ensuring substantively egalitarian economic outcomes;5 curbing the outsized influence of the economically powerful in elections and government;6 and reorienting consumer protection from a narrow view of consumer sovereignty to substantive goals of fairness and consumer protection.7

Building on earlier work reconceptualizing antitrust law as the legal organization of economic coordination,8 this Feature deepens and seeks to provide a foundation for the current normative broadening in the antitrust field and ultimately, in adjacent areas relating to market organization.9 As normative reconstruction, it may help to guide current reform efforts as well as the interpretation and implementation of the existing antitrust laws. As part of this reconstruction, I reinterpret the legislative history of the Sherman Act, both as to affirmative purpose and as to judicial role. I propose a core prescription: the command to disperse economic coordination rights. This core prescription in turn implies three key tasks: taking affirmative steps to contain domination, to accommodate and promote democratic coordination, and to set rules of fair competition. The notion that antitrust law can be governed by a scientific ideal that transcends contestation over values has understandable appeal but is not logically sustainable. That conclusion both clears the way for and requires particularized normative elaboration, which this Feature aims to provide.

This proposed antitrust prescription draws on a moral economy vision, which takes the social coordination of markets as given, and embraces making and implementing normative choices about market construction as a key regulatory task. This vision runs through each of the three sources I primarily consider: the pre-enactment common law of restraint of trade and its antecedents, nineteenth-century antimonopoly politics, and the Sherman Act’s legislative history. The common-law tradition generally viewed markets as socially and legally constituted, rather than self-regulating: from this perspective, the key issues were distinguishing between beneficial and deviant coordination, and enforcing rules of fair competition—rather than punishing coordination as such, or promoting competition as such.10 The nineteenth-century antimonopoly political vision, grounded in a farmer-labor coalition, offered an egalitarian interpretation of moral economy traditions. This vision critically involved both cultivating democratic coordination and containing domination11—or “power with” rather than “power over,” as it would later be articulated in Progressive
thought.12 Within the moral economy perspective, all markets are understood to be coordinated, and in the antimonopoly vision, democratic coordination is the preferred mode.

The legislative record, too, is continuous with the moral economy framework, which makes sense of legislators’ actions better than an analytical framework that revolves around self-regulating markets. While recovery of legislative purpose in antitrust has recently not been in fashion,13 this account builds on an older literature that has shaped the law and broader thinking.14 I argue that the core prescription suggested by the legislative history is to disperse economic coordination rights.15 This prescription entails both containing domination and accommodating democratic coordination, while also carrying forward the emphasis on fair competition already present in the common-law tradition.

The normative thread traced here, culminating in an argument about legislative purpose, is interwoven with an argument about institutional roles. The widely held conventional wisdom is that the Sherman Act is the paradigmatic “common-law statute,” entailing a delegation of lawmaking power by Congress to the courts that spans the field of antitrust.16 The common-law-statute thesis is more than just the proposition that the courts should guide the application of the law as circum­­stances change. Instead, it has been understood as an effective “blank check” to federal courts to generate the foundational normative criteria according to which the statutory framework will function.17

This judicial power enabled the last major paradigm shift in antitrust law,18 associated with the Chicago School of antitrust thinking.19 Recent articulations of this judicial primacy reflect how closely connected it is to the substantive content of the legal developments it facilitated: “the Sherman Act can be regarded as ‘enabling legislation’—an invitation to the federal courts to learn how businesses and markets work and formulate a set of rules that will make them work in socially efficient ways.”20 A primary basis for judicial primacy in antitrust lawmaking is the notion that by adopting the phrase “restraint of trade” in Section 1 of the Sherman Act, Congress “invoke[d] the common law itself.”21 As a result, according to proponents, the Sherman Act “effectively authorize[s] courts to create new lines of common law.”22 But the legislative history of the Sherman Act undermines both the argument for judicial supremacy and the particular prescriptions with which the most pronounced, current episode of judicial lawmaking has been associated.23 As such, this Feature contributes to a growing literature that focuses on the institutional character of antitrust decision-making,24 and specifically builds upon an emerging conversation about the role and character of judicial lawmaking power in the field.25

Part I of this Feature addresses the common-law context of the statutory text “restraint of trade,” emphasizing its origins in the moral economy concepts of fair price and fair competition. Part II describes the social-movement context to which legislators were responding—namely, the antimonopoly coalition. Part III reinterprets the legislative history itself, arguing that it establishes an underlying decision rule to disperse economic coordination rights. Part IV argues that the strong form of judicial primacy in antitrust decision-making emerged in tandem with relatively recent legal developments, and that the canonical justifications for this approach rely on the normative economic views with which it is associated. Finally, Part V briefly sketches the beginnings of an alternative path forward for implementing the core antitrust prescription described herein.