A Revolution Ignored?

For a book with the word revolution in its title, Kwoka and White’s book has been cited only twice by either a state or a federal court: once by the Seventh Circuit in 2002 on the matter of facilitating practices, a theory not raised in the suit against brand name prescription drugs, ¹ and once again by the Eleventh Circuit in 2002 per a dissenting judge urging en banc review in a case involving telephony. ² Some revolution, you might say. Actually, this is a badge of honor. The antitrust revolution shall not be cited or televised. But the scholarship promoted throughout the seven editions of The Antitrust Revolution has raised the standard for effective economic research in support of legal advocacy. Court citations need to catch up with scholarship.

Kwoka and White’s volumes have served teachers, researchers, and antitrust attorneys equally well. Its chapters work effectively in a law classroom to expose students to sensible economic analysis. Without a fail, contributors have shared important research findings at the intersection of legal reasoning and economic analysis. Antitrust attorneys find in the chapters useful guidance on how to frame economically minded legal theories and to present the relevant economic evidence. I personally have eagerly anticipated each new volume.

For me, I admire the methodological mash-ups provided by the volumes. Neoclassical economics and contemporary game theory combine with statistical analysis and institutional detail to inform legal arguments about the rule of reason, predatory conduct, the overreach of intellectual property rights, and market foreclosure. A good label might be pragmatic institutionalism, a response to the lost promise from old-style institutional analysis of the historicist school and the more contemporary new institutionalism. ³ The pragmatic analysis is a fulfillment of Ronald Coase’s empirical approach to economics and law:

Contemplation of an optimal system may suggest ways of improving the system.…But in general, its influence has been pernicious. It has distracted economists’ attention away from the main question, which is how alternative arrangements will work in practice…. Until we realize that we are choosing between social arrangements which are more or less failures, we not likely to make headway. ⁴

A realist approach to law, economics, and antitrust points to the kind of comparative institutional analysis that we see in the pages of The Antitrust Revolution.

So, what about welfare? The normative is not ignored. You can find plenty of measures of deadweight loss and surpluses strewn through economic analysis. But the analysis is not about discovering the optimal allocation for law to implement. Instead, the discussion is consequentialist, identifying through measurement and theory what the effect of legal rules could be. Identified consequences followed by judicious recommendations is an arc bending toward normative criteria, some mix of efficiency and equity. For the welfare maximizers, this approach may be disappointing and blind to obvious truths about how markets work. But then again if matters were so obvious, there would be no litigation and no debates about antitrust policy.

One wonders why the courts have not cited the volume in its opinions. Part of the explanation is one of timing. Contributors to The Antitrust Revolution have been expert economists and advocates who have turned their legal briefs into book chapters. This was the case, to take just one example relevant to my current research, with work on antitrust cases brought by independent photocopier service providers. ⁵ Expert testimony communicated in the chapter had already informed the court, shaping the decision and serving as invaluable materials for classroom discussion. The Kwoka–White volumes enlighten and enrich the antitrust debates without the metaphysics of welfarism. And that perhaps is what is the true sign of the revolution, one lived in teaching and scholarship.