Antitrust policy has often been portrayed as a struggle between free-marketers and populists. In The Ideological Origins and Evolution of Antitrust, William Page labels the two competing ideologies evolutionary and intentional.

The first of antitrust’s defining ideologies, which I call the evolutionary vision, views the market, framed by common law rules of property and contract, as a mechanism for facilitating free exchanges among countless individuals in the pursuit of their best interests. In that vision, the conditions that emerge from market processes, including the distribution of wealth, are fundamentally legitimate and, except in rare cases, unintended by any individual market actor. … The second great ideology, however, which I call the intentional vision, views the market as a mechanism within which powerful interests can coerce consumers, labor, and small businesses; market structures, consequently, tend toward monopoly. In the intentional vision, the unfair outcomes of market processes can and should be corrected by democratic, governmental intervention, including direct regulation.

This is an excellent summary, but let me try to put the issue a bit more starkly. The underlying question is: What is the moral significance of wealth or economic power? There are two competing views.

• Wealth as a sign of moral goodness. Wealth (and its implications, power, and unequal patterns of distribution) is the result of a series of free, consensual exchanges, of trades that, with a priori necessity, must have made both parties to the exchange better off (or else, people wouldn’t have traded). The implication is that, in a free market economy, one can only get rich by serving others. Power and wealth are the result of (and the just reward for) having bettered most everyone’s lot along the way. That, in a nutshell, is the core of market idealism.
• Wealth as a sign of moral corruption. Wealth (and its implications, power and unequal patterns of distribution) is the result of exploitation by means of coercion or deception. “Free, consensual exchanges” only exist among equals in power. In every other case, the strong do what they can and the weak suffer what they must. The implication is, that one can get rich only by exploiting others. Wealth and power are the reward of the ruthless, of those who have been more successful in exploiting the weak. That, in a nutshell, is the core of coercion idealism.

These are the competing visions animating not only antitrust law and policy, but also much of the discussion about free markets, regulation, big business, socialism, distributive justice, and globalization. One critical insight is that the competing views don’t necessary rely on incompatible normative standards. Rather, their disagreement is couched in descriptive terms, in the proposed causal explanations for what brings about wealth and power: free exchange on the one hand, exploitation on the other. Of course, almost no participant in this discourse engages in the empirical work that would be required to provide the microfoundations for their beliefs. In that sense, both views are idealisms, reflective more of individual value commitments than of how the world really works. Casual empiricism at least suggests that almost every exchange contains elements of both, freedom and coercion (however loosely defined). The critical question is, of course: how much of each? An empirical answer to that question would bring us closer to solving the underlying age-old philosophical problem than entire libraries of conceptual analyses of “power” and “freedom” have brought us so far.

Note: Cross-posted at Law & Society Blog.

Technorati Tags: antitrust, politics, ideology

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