Bound print copies of George Mason School of Law’s working paper series on law and economics are available in the Law Library. The bound set often includes initial drafts of papers. Search Mason’s Catalog to locate a working paper.

Recent Working Papers:


The State’s Monopoly of Force and the Right to Bear Arms

10-2020 | Robert Leider

ABSTRACT:

In debates over the Second Amendment, the conventional view is that the government ought to possess a monopoly of legitimate force, subject to the right of individuals to act in emergency self-defense. Many treat the non-defensive circumstances in which our system decentralizes force as holdovers from days of nonprofessional police and soldiers. When it comes to the Second Amendment, many believe that the only legitimate reason individuals may bear arms today is for individual self-defense against isolated criminal violence (e.g., an occupied home invasion).

This symposium article attacks the monopoly of force account, justifying the continued relevance of American law’s decentralization of legitimate force. This article argues that decentralization of force remains important for three reasons. First, despite the rise of professional police, American law enforcement still enforces law below desirable levels. Underenforcement of core crimes is particularly a problem in disadvantaged and rural communities and during times of civil unrest. Decentralization of force helps mitigate the underenforcement problem. And decentralization may be a better solution than simply providing more police because many areas where law is underenforced also (paradoxically) suffer from the effects of overcriminalization. Increased police presence could make the overcriminalization problem worse without solving the underenforcement problem. Second, American law has a mismatch between public duties and private rights. While providing effective law enforcement is a public duty, it is not a private right. Individuals, thus, have no effective claim that the government adequately enforce the law or protect them against unlawful violence. And any attempt to create such a private right would create profound separation of powers concerns. Consequently, self-help and private law enforcement are the best remedies when governments undersupply needed levels of police protection. Third, even if the “government” has a monopoly of force, it does not follow that government officers are the only ones in whom the government’s monopoly may be vested. The “government” is an incorporeal entity whose power must be exercised by human agents. Agents do not perfectly carry out the tasks of their principals; some government officers commit malfeasance and nonfeasance. The decentralization of force provides a remedy for such abuses of office.

Ultimately, the article concludes that the individual right to bear arms still has relevance for public defense and security. This fact should warrant consideration when determining the scope of the right, including that the arms protected by the Second Amendment should continue to include those arms whose primary value is public security rather than individual self-defense.

European Commission’s Notice on the Definition of Relevant Market for the Purposes of Community Competition Law, Comment of the Global Antitrust Institute

10-2020 | Camila Ringeling, Tad Lipsky, Douglas Ginsburg, Bruce Kobayashi, Joshua Wright

ABSTRACT:

This comment is submitted by the Global Antitrust Institute (GAI) to the European Commission (Commission) for consideration in relation to its consultation on its Notice on the definition of relevant market for the purposes of community competition law.

The Right to Armed Self-Defense in the Light of Law Enforcement Abdication

10-2020 | David Bernstein

ABSTRACT:

This article defends the position that the right of armed self-defense remains important today, in particular in light of the civil unrest of the Summer of 2020. The article proceeds in three parts. The first part will summarize arguments from various prominent commentators that the right to self-defense with firearms is anachronistic in the contemporary United States. These critics argue that Americans can and should rely solely on their local professional police force to protect them.

The second part of the article will focus on how this argument has been undermined by recent events. This part documents in great detail the failures of law enforcement in reaction to looting, rioting, and other forms of illegal behavior that threatened the well-being of the public. First, many police departments received implicit or explicit orders from their political supervisors to “stand down.” Second, in many instances, the police themselves were unwilling or unable to combat lawless behavior. If police consistently fail to enforce law and order, the argument against the individual right to bear arms for self-defense purposes significantly weakens.

Finally, the last part of the article will discuss examples of individuals and groups of citizens using firearms in self-defense during the recent unrest in the absence of effective law enforcement. Some of these episodes are open to criticism, whether on the grounds that one believes that it’s never worth using or even threatening to use deadly force to defend property, or because the line between justified self-defense and unjustified vigilantism is not always a clear one. Nevertheless, if law enforcement is unwilling or unable to preserve basic law and order, it’s both inevitable that citizens will try to fill the breach, and desirable that law-abiding individuals should be given the means to do so.

Self Defense, an Unalienable Right in a Time of Peril: Protected and Preserved by the Second Amendment

10-2020 | Joyce Malcolm

ABSTRACT:

For Americans frightened for their own and their family’s safety, the Covid-19 pandemic; lockdown in March 2020; release of convicted offenders; protests against the police morphing into weeks of violence and calls to defund them; and a presidential candidate promising to seize their guns has led to record-setting applications for firearms. This essay explores the constitutional background of the right to armed self-defense then tests the arguments against it: 1) it’s unnecessary, the police will protect you and 2) guns in your hands pose a danger to public safety. But can the police protect us and do they have a legal duty to do so? To answer the questions the success of restraining orders for vulnerable individuals and violent crime statistics during an era of increased public carry are examined. The essay concludes with the experience of England, where the very right to self-defense has been effectually removed.

The Future of the Second Amendment in a Time of Lawless Violence

9-2020 | Nelson Lund

ABSTRACT:

Joseph Blocher and Reva Siegel have focused attention on an underappreciated dimension of the debate about the constitutional right to keep and bear arms. They reject a narrow concept of “public safety” that evaluates regulations “without full consideration of what is encompassed in that concept—freedom from intimidation, for example, not just physical pain.” At this level of generality, I agree. But I do not agree that an appropriately broad conception should widen the discretion of legislatures to impose restrictions on firearms.

The questions that Blocher and Siegel raise are especially important during this time of politically inspired riots and flaccid government responses to mob violence. The most practically important Second Amendment issue that is ripe for Supreme Court resolution concerns the scope of the constitutional right to bear arms in public. The Constitution’s text and history offer little direct guidance, and the Justices will inevitably have to decide how to resolve the conflict of interests that occur when governments seek to promote public safety by depriving individuals of the means to protect themselves.

In performing this obligation, the Court should give no weight to fears of an armed citizenry, which frequently inspire useless or counterproductive infringement on individual liberty. Nor should regulations enjoy a presumption of constitutionality merely because they may promote a net reduction in deaths and physical injuries. The deepest principles on which our legal and constitutional institutions rest, which are reflected in the Second Amendment, are at odds with this kind of narrow cost-benefit calculation.

The right to keep and bear arms, and to use them when appropriate, is a vital element of the liberal order that our Founders handed down to us. They understood that those who hold political power will always be tempted to reduce the freedom of those they rule, and that many of the ruled will be tempted to trade their liberty for promises of security. Those temptations are apt to be especially alluring when widespread criminal violence threatens both liberty and security. They may be even more alluring when such violence takes the form of sustained and repeated mob violence that reflects a serious breakdown of the social fabric.

The causes of these temptations are sown in the nature of man. Our Constitution, including the Second Amendment, is a device designed to frustrate the domineering tendencies of the politically ambitious. The Second Amendment also plays an important role in fostering the kind of civic virtue that resists the cowardly urge to trade liberty for an illusion of safety. Armed citizens take responsibility for their own security, thereby exhibiting and cultivating the self-reliance and vigorous spirit that is ultimately indispensable for genuine self-government. 

 Our rulers include the judges charged with protecting our Second Amendment rights, and they are subject to the same temptations as other government officials. As they develop the nascent jurisprudence of this recently rediscovered constitutional provision, they have an opportunity to show that they understand how a robust right to keep and bear arms serves both individual freedom and civic virtue. If they fail to do that, they will help the nation take a significant step toward the soft despotism to which Tocqueville feared we would succumb.

Access to Substance Use Disorder Treatment During COVID-19: Implications from Reduced Local Jail Populations

9-2020 | Erkmen Aslim, Murat Mungan

ABSTRACT:

Many states have responded to the spread of COVID-19 by implementing policies which have led to a dramatic reduction in jail populations. We consider benefits associated with providing the population of individuals who would, but for these policies, be incarcerated with substance use disorder (SUD) treatment. We discuss problems that may prevent this population from receiving SUD treatment as well as policies which may mitigate these problems.

Are We Dropping the Crystal Ball? Understanding Nascent & Potential Competition in Antitrust

9-2020 | John Yun

ABSTRACT:

We root for the underdog, and nascent and potential competitors are the antitrust version of underdogs. They introduce a promising product and innovation with the hopes of challenging the incumbent for supremacy in a market. Yet, are those hopes cancelled before they even begin with powerful incumbents acquiring these nascent and potential competitors? Some even refer to these acquisitions as “killer.” However, is this the full story? Assessments of nascent and potential competition are ultimately about “what if.” What if the upstart competitor grows into the next dominant platform or develops the next blockbuster drug? What if the incumbent knows its market position has a weakness that the entrant will exploit so the incumbent must end the competition before it even begins? On the other hand, what if the nascent competitor never fully develops its potential and engages in a series of missteps? What if the nascent competitor’s innovation can be improved upon and reach the market faster and more widely through the well-oiled machinery of the incumbent? These are all possible scenarios. The problem is that the counterfactual world is never actually observable. Thus, speculative “what ifs” cannot guide antitrust policy—whether in an overly permissive or aggressive manner. What are we left with? What should agencies and courts do in face of such uncertainty? This Article offers a number of propositions to address these concerns and questions in regard to competition that has not been fully realized. First, the Article offers a clear legal and analytical delineation between the doctrines of nascent and potential competition—as there has recently been a degree of “semantic satiation” between these two concepts. Second, some have argued that the acquisition of nascent competitors should be adjudicated using legal standards developed under the Sherman Act, Section 2, which covers monopolization, rather than under the traditional Clayton Act, Section 7, which governs mergers and acquisitions. Yet, the counterfactual exercise is fundamentally different between ex ante merger evaluations (Section 7) and ex post monopolization claims (Section 2). Consequently, based on this fact alone, courts should be cautious to adopt Section 2 approaches to Section 7 issues. Third, when evaluating the wider set of proposals to address the nascent and potential competition problem, which the Article comments on, we must ask whether there is a problem in the first place. To that end, the Article examines a number of recent merger retrospectives. Finally, while using the past to predict the future can be a difficult and uncertain exercise even within mature markets, these hinderances can be overstated. Economic tools are available to frame our approach, and agencies and courts should focus particularly on whether the characteristics and nature of the acquired nascent competitor are sufficiently differentiated from the remaining competitors to warrant increased scrutiny.

Laws and Norms with (Un)Observable Actions

8-2020 | Claude Fluet, Murat Mungan

ABSTRACT:

We analyze the interactions between social norms, the prevalence of regulated acts, and policies. These interactions are impacted by people's inability to directly observe actors' behavior. Norms are ineffective incentivizers when acts are committed either very frequently or very infrequently, because noisy signals of behavior are then too weak to alter people's beliefs about others' behavior. This cuts against the dynamics of the `honor-stigma' model (Bénabou and Tirole 2006, 2011) and reverses its implications with even moderately noisy signals. With unobservable acts, the review process through which incentives are provided becomes an additional policy variable whose optima we characterize.

The Case for Second Amendment Sanctuaries: The Duty to Defend the Constitution

8-2020 | Joyce Malcolm

ABSTRACT:

In the wake of proposed new gun regulations the Second Amendment sanctuary movement swept Virginia and other states. The aim, to defend residents against loss of their constitutional right to keep and bear their private firearms, has been dismissed by governors and other authorities as a meaningless gesture. But is it? Federal, state and local officials are sworn to preserve, protect and defend the American Constitution. In addition forty-four states have the right to be armed in their constitutions. What is expected of those who swear that oath? This essay lays out the scope of the sanctuary movement and explores the obligation to protect a constitutional right to be armed.

Private Rules and Standards

8-2020 | Tun-Jen Chiang

ABSTRACT:

There is an enormous literature on the question of whether legal directives should take the form of rules or standards. This literature generally focuses on public laws such as statutes and regulations. Private legal instruments such as patents, contracts, and wills are given little thought. This Article analyzes the choice in the private law context.

Beyond making the obvious-yet-overlooked point that the rules/standards choice applies to private laws, the Article makes two contributions. First, it explores the normative arguments for rules and standards when applied to privately made laws, which are sometimes similar to, and other times different from, the arguments given in the context of public laws. For example, in the public law context, an argument in favor of rules is that they provide notice of expected behavior, while an argument in favor of standards is that they allow tailoring to individual circumstances. Neither argument works when applied to a negotiated private contract: the parties do not need to be notified about what is in their own contract, and the negotiated contract is tailored to the parties’ circumstances.

Second, the Article asks a positive question: will drafters actually choose a rule or standard, given the drafter’s private incentives? This question is rarely asked with respect to public laws, because drafters such as legislators are implicitly assumed to be pursuing the public interest. Private drafters are unlikely to be so public-spirited. The Article provides a model of how clashing incentives between private drafters (who pursue self-interested goals) and courts (who resist those goals) shapes the rules/standards choice. It then explains how this model helps explain drafting choices and interpretative doctrine with respect to contracts, wills, and patents.

An Unreasonable Solution: Rethinking the FTC's Current Approach to Data Security

7-2020 | James Cooper, Bruce Kobayashi

ABSTRACT:

Since the early 2000s, the FTC creatively employed its capacious statute to target shoddy data practices. Although the FTC’s actions arguably were needed at the time to fill a gap in enforcement, there are reasons to believe that its current approach has outlived its usefulness and is in serious need of updating. In particular, our analysis shows that the FTC’s current approach to data security is unlikely to instill anything close to optimal incentives for data holders. These shortcomings cannot be fixed through changes to the FTC enforcement approach, as they are largely generated by a mismatch between the tools that Congress gave it over a century ago and what it needs to foster firms’ incentives to mimic socially optimal levels of care for the data they hold. Not only does the current framework likely suffer from informational deficiencies attendant to its focus on “reasonable” security that render liability standards uncertain, it also lacks the ability obtain the type of relief that will force firms to internalize the costs of their data security decisions. We examine the problem of data security enforcement through the lens of the economics of optimal precautions and identify several reasons why a strict liability regime administered by the FTC in which firms pay for the expected harm from breaches they cause is likely to be superior to the current framework that revolves around the concept of reasonableness. The benefits from strict liability flow from the likelihood that firms do not fully internalize the costs and benefits of their data security decisions and the relatively large informational burdens associated with measuring actual and optimal care under a negligence regime. We also show why in this informational environment strict liability is better than negligence for developing a vibrant market for cyber insurance, which will allow data security regulation to be de facto outsourced to insurers who will contract with firms for optimal levels of care. Because these private contracts will harness private information on costs and benefits from precautions, they are likely to incentivize more efficient behavior.

The Limit of Law: Factors Influencing the Decision to Make Harmful Acts Illegal

7-2020 | Thomas Miceli, Murat Mungan

ABSTRACT:

This paper examines factors affecting the decision of whether or not to make certain harmful acts illegal. It considers factors related both to the cost of law enforcement and to the crime commission decision. On the enforcement side, illegality is limited by the existence of fixed notice and response costs, which are unrelated to the harm from the act, and also by costs of imposing punishment. In addition, illegality is limited by a finite marginal productivity of detection, one cause of which is legal error. On the commission side, illegality is limited if all offenders have strictly positive benefits from committing the act. The paper concludes by examining how the optimal scope of law is affected by its “expressive function,” the idea that some people are deterred by the mere fact that an act is illegal. We specifically ask how the scope of law changes if more people behave in this way. The answer depends on whether “efficient” violations of the law are possible, which in turn depends on whether offenders’ gains are counted in welfare.

Unleashed and Unbound: Living Textualism in Bostock V. Clayton County

7-2020 | Nelson Lund

ABSTRACT:

In Bostock v. Clayton County, Georgia the Supreme Court held that Title VII of the Civil Rights Act of 1964 prohibits—and has always prohibited—discrimination by employers on the basis of homosexuality or of what the Court called transgender status. How so? The statute forbids employers to intentionally discriminate against any individual “because of such individual’s . . . sex.” The Court asserted that discrimination because of homosexuality or transgenderism violates the unambiguous text of the statute.

This result in this case decision would not have been much of surprise in the period during which Justice Anthony Kennedy held the controlling vote on issues dealing with sex, and especially with homosexuality. But the 6-3 majority opinion in Bostock was written by Justice Neil Gorsuch and joined by Chief Justice John Roberts. The majority opinion has virtually no policy analysis or political rhetoric, and it lacks the kind of inflated pseudo-philosophic pontification that Kennedy favored. Instead, the Bostock opinion presents itself as nothing more than a straightforward application of the legally binding text of the statute. Justice Gorsuch even goes out of his way to cast himself as the legitimate intellectual successor to the man whom he literally succeeded: the high priest of statutory textualism, Justice Antonin Scalia.

Leaving others to speculate about judicial motives, I propose that Bostock is an extension of a theory commonly called “living originalism.” During the last decade, this approach to constitutional interpretation has been gaining steam in the legal academy. Bostock has now effectively extended that approach beyond the academy, beyond the field of constitutional interpretation, and even beyond the limits recognized by its academic adherents.

Bostock is a demonstrably outlandish judicial performance. Outlandish though it is, Bostock might be used by the Court to correct one of its most egregiously mistaken lines of case law. Although Title VII unambiguously forbids employers to discriminate on the basis of race or sex, the Court has upheld quotas and preferences explicitly based on the race or sex of people in favored groups. In 1991, Congress amended Title VII by adding a new provision whose text unambiguously overruled the decisions that upheld these preferences. Even without using the peculiar new form of textualism deployed in Bostock, the Supreme Court should have recognized that the 1991 amendment deprived these precedents of any binding force they may once have had. The Court has not done so, but Bostock now imperatively requires the Court to declare that Title VII forbids, and has always forbidden, these illegal employment practices.

Use and Abuse of Bargaining Models in Antitrust

7-2020 | Joshua Wright, John Yun

ABSTRACT:

Bargaining is all around us. Bargaining is how prices are set across a range of economic activities such as between licensors and licensees of intellectual property, employees and employers, content providers and distributors, health insurers and hospitals, and in many intermediate product markets. Recently, bargaining has played a central role in a number of high-profile antitrust matters. In 2018, the U.S. Department of Justice challenged AT&T’s acquisition of Time Warner — largely on the basis of a bargaining model. Also, in 2018, the U.S. Federal Trade Commission argued that Qualcomm’s market position in cellular chipsets allowed it to leverage higher royalty rates for its standard essential patents (“SEPs”), in violation of its commitment to license its SEPs on fair, reasonable, and non-discriminatory (“FRAND”) terms. In this article, we assess the value of economic bargaining models to predict outcomes for both horizontal and vertical mergers and for unilateral conduct. To that end, we first provide an overview of the economics of bargaining models and their primary features, including the vertical GUPPI variant. We then discuss these models in the context of recent antitrust cases and detail the uneven judicial adoption of bargaining models. Next, we examine whether the current judicial reticence is justified. We review a body of emerging scholarship that suggest some caution on the use of methodologies to predict harm based on bargaining models. This suggests that a healthy degree of judicial skepticism is warranted — whether coherently articulated in opinions or not. In conclusion, we offer some policy recommendations for the use of bargaining models, which we believe will lead to a more balanced approach regarding their use in antitrust matters.

Pension Forfeiture and Police Misconduct

6-2020 | D. Bruce Johnsen, Adam Marcus

ABSTRACT:

This article applies the theory of efficiency wages to public sector pension-covered workers for whom employee misconduct is most troublesome, namely state and local police. No doubt most police are conscientious professionals capable of addressing tense or inflamed situations with the proper amount of restraint, but there is also a large and rising incidence of police excessive use of force and other forms of misconduct that needs to be addressed. At the same time, state and municipal pension systems are frighteningly underfunded owing to unrealistically high rate-of-return assumptions and implausibly high rates at which liabilities are discounted, with several bankruptcies having already occurred or in process. 

This paper examines how the rules regarding police pension forfeiture for misconduct vary across states and whether stricter forfeiture might help avoid fiscal crisis. The positive questions we ask are whether stricter pension forfeiture rules can realistically reduce either (1) pension liabilities owing to the increased prospect of for-cause termination or (2) state and municipal governments’ legal liability under respondeat superior for officer misconduct. If the answer is yes to either question, the normative question is whether states can and, if so, should impose stricter pension forfeiture rules to directly or indirectly avert the looming public pension crisis. If not, the conclusion is that the use of public pensions to provide efficiency wages is severely limited, and that serious thought should be given to abandoning defined benefit (DB) plans going forward in favor of defined contribution (DC) plans, which are far less costly to administer.

Our initial and admittedly casual evidence suggests that states with stronger pension forfeiture laws experience lower rates of police misconduct. Even if stricter police pension forfeiture is found to materially reduce the incidence of misconduct, the compelling conclusion is that it is unlikely to materially mitigate the looming public pension crisis because the amount of money at stake is so small. It is plausible, however, that the indirect fiscal effect of stricter police pension forfeiture for misconduct could be substantial because municipalities across the country currently pay out hundreds of millions of dollars annually on citizen suits for excessive use of force. With police pensions contingent on good faith performance in the line of duty, it is uncontroversial that misconduct will decline as the expected losses from misbehavior increase.

Gender Mistrust as a Public Health Crisis: A Preliminary Proposal

6-2020 | Helen Alvaré

ABSTRACT:

There is an increasingly well-documented phenomenon in the United States of gender mistrust between men and women, especially among the socioeconomically vulnerable. It is one of the factors that prevents and breaks down stable, long-term relationships like marriage and the parenting of mutual, marital children. Gender mistrust has negative personal and social effects upon women’s well-being. Of course, it also has negative effects upon the well-being of men, children, and wider society. Each deserves attention. But the subject of this Symposium invites a focus upon women.

Gender mistrust (sometimes called “gender distrust”) is the tendency of one sex to negatively characterize the other sex based upon generalized and derogatory stereotypes and biases. I propose that gender mistrust between men and women is a public health crisis and as such, a fit subject for the attention of lawmakers and policymakers. A great deal has been written about gender mistrust from a sociological and psychological perspective, but nothing has treated it under the heading of “public health.”

Introduction, Free to Move: Foot Voting, Migration, and Political Freedom

6-2020 | Ilya Somin

ABSTRACT:

Ballot box voting is often considered the essence of political freedom. But it has two major shortcomings: individual voters have little chance of making a difference, and they also face strong incentives to remain ignorant about the issues at stake. "Voting with your feet," however, avoids both of these pitfalls and offers a wider range of choices. In Free to Move, Ilya Somin explains how broadening opportunities for foot voting can greatly enhance political liberty for millions of people around the world.

People can vote with their feet through international migration, by choosing where to live within a federal system, and by making decisions in the private sector. These three types of foot voting are rarely considered together, but Somin explains how they have important common virtues and can be mutually reinforcing. He contends that all forms of foot voting should be expanded and shows how both domestic constitutions and international law can be structured to increase opportunities for foot voting while mitigating possible downsides.

Free to Move addresses a variety of common objections to expanded migration rights, including claims that the "self-determination" of natives requires giving them the power to exclude migrants, and arguments that migration is likely to have harmful side effects, such as undermining political institutions, overburdening the welfare state, increasing crime and terrorism, and spreading undesirable cultural values. While these objections are usually directed at international migration, Somin shows how a consistent commitment to such theories would also justify severe restrictions on domestic freedom of movement. That implication is an additional reason to be skeptical of these rationales for exclusion. By making a systematic case for a more open world, Free to Move challenges conventional wisdom on both the left and the right.

The Introduction summarizes the core argument of the book and provides an outline of the chapters that follow.

Submission to House Judiciary Committee Inquiry on Digital Economy

6-2020 | Timothy Muris

ABSTRACT:

To assist in its investigation of competition in the digital marketplace, the Judiciary Committee invited comments on topics relevant to that investigation. This response contains four sections. The first briefly describes my background and explains that I support aggressive antitrust enforcement when it will in fact benefit consumers. My experience in antitrust spans nearly five decades as a student, professor, scholar, enforcer, expert, consultant, and practitioner. I have served in multiple government positions, including at the Federal Trade Commission as Director of both enforcement bureaus — the only person ever to hold both jobs — as well as Chairman from 2001 to 2004. This section rebuts recent claims that applying the methodology underlying modern law, known as the consumer welfare standard, prevents an aggressive, pro-consumer Antitrust policy, particularly under Republicans. The two periods when I was most responsible for FTC antitrust enforcement — the mid-1980s and the beginning of this century — were the most active in the last 40 years using the FTC’s administrative procedures to attack a wide variety of anticompetitive practices ranging from those in healthcare and in professional associations, to the misuse of the machinery of government to harm competition, to preventing anticompetitive increases in energy prices. With respect to a topic of particular current interest, while Chairman the FTC filed four cases alleging single-firm monopolization over three years — an unusually high rate of activity in this very resource-intensive area of the law. For example, in one case, against the oil company Unocal, we successfully lowered the gas price at the pump for all California consumers.

The next section addresses the adequacy of existing laws regarding monopolization and anticompetitive transactions, questions that implicate the heart of the current debate on how antitrust law has been interpreted and enforced for decades using the consumer welfare standard. That standard, based in sound economic analysis, and its companion holding by American courts that the purpose of antitrust law is to protect consumers, not competitors, has been crucial to avoiding the many mistakes of antitrust’s past — especially a “big is bad” animus that too often lead the law and agencies astray. Because today’s critics ignore the mistakes of that past, I discuss them here, especially how the protection of competitors and not competition, as reflected in the Robinson-Patman Act (“RPA”), not only was one of antitrust’s worst mistakes, but also how RPA and the Justice Department's long war against the then largest retailer in America, the Great Atlantic and Pacific Tea Company (A&P), poisoned antitrust for decades to the great detriment of American consumers. Sensible application of the consumer welfare standard would have avoided those catastrophes.

Today’s critics base much of their hostility to the consumer welfare standard, and to the long-standing antitrust consensus that they seek to overthrow, on the claim that those associated with the University of Chicago seized control of antitrust law and remade it in their image. The next section shows that such arguments are bogus: many of the scholars who first helped antitrust escape the fallacies of the RPA and the associated crusade against A&P, although dedicated to the same pro-consumer use of economics that the consumer welfare standard demands, were not members of the so-called “Chicago school.” On the contrary, numerous scholars associated with Harvard, most notably Professor Phillip Areeda — an original author of the leading Antitrust treatise — and Supreme Court Justice Stephen Breyer have been at least as influential as those affiliated with Chicago in the development of modern antitrust law under the consumer welfare standard.

Finally, the last section addresses the continual need to address business practices as they evolve. Ever a UCLA Bruin, I remain devoted to legendary coach John Wooden‘s maxim that “when you are through learning, you are through.” The section offers multiple examples of successful, bipartisan FTC efforts to improve enforcement to the benefit of consumers. In the key healthcare sector, American consumers continue to benefit from the FTC’s hard work. After the government lost seven hospital merger challenges in the 1990s, upon my direction the FTC worked to devise a new enforcement plan by incorporating fresh economic thinking and issuing retrospective case studies showing that several hospital mergers had indeed harmed consumers. This plan resulted in a successful challenge to a consummated hospital merger that served as a template for future enforcement, leading to Obama administration victories in three separate courts of appeal endorsing the FTC’s approach. Such success did not require abandonment of the consumer welfare standard, nor a dramatic increase in agency resources. Indeed, my predecessor as FTC chairman, Bob Pitofsky, did much more for American consumers using the consumer welfare standard with just 1,000 staff than did the agency in the 1970s when it had far greater resources (1,800 staff by the turn of the decade), but was motivated by an antitrust policy that was, instead, at war with itself.

Early Customs Laws and Delegation

6-2020 | Jennifer Mascott

ABSTRACT:

This past Term the Supreme Court reexamined the nondelegation doctrine, with several justices concluding that in the proper case, the Court should consider significantly strengthening the doctrine in its contemporary form. Adherents to the doctrine question whether Congress has developed a practice of improperly delegating to administrative agencies the legislative power that Congress alone must exercise under the Vesting Clause of Article I of the Constitution. Many scholars have debated the extent of the historical or textual basis for the doctrine. Instead, this Article examines interactions between executive and legislative actors during the first congressional debates on the Impost, Tonnage, Registration, and Collection of Duties Acts. In addition to revealing Congress’s central role early on, this story shows the relevance of state and congressional district interests to the legislative agreements concerning customs laws. The rich depth of these varied interests suggests that nondelegation limitations might not be inherent in the Vesting Clause alone, but may be innate to the federal government’s tripartite and federalist structural design itself.

The Constitution carefully provided significant protection for state interests through diverse representation schemes in the House and the Senate. Beyond the textual limitation of exclusive vesting of the legislative power in Congress, separation of powers principles help ensure all people’s interests are represented in a way that would not be possible via a singular, centralized administrative entity. The acts of such administrative entities are accountable, if at all, to just one centralized elected official, not to multiple elected decisionmakers representing states and regional interests. Consequently, enforcement of relatively strict nondelegation principles may be critical to preserving the structural constitutional principle that the federal government must reflect the interests of both individual members of the electorate as well as the states and regional electoral districts.

The Exclusionary Rule Revisited

5-2020 | Nuno Garoupa, Murat Mungan

ABSTRACT:

We revisit the economic theory of exclusionary rules. First, we show that more exclusion may induce enforcers to conduct more searches, contrary to the standard notion that more exclusion leads to fewer searches. Second, we identify and investigate the complexities that arise when enforcers may harass suspects (imposing significant costs without legal proceedings) instead of conducting legal searches. If one attempts to choose the optimal exclusionary rule naïvely (for example, by ignoring the possibility of harassment by enforcers), the chosen rule will exclude evidence more often than is optimal. We explore social welfare considerations and discuss policy implications based on our formal results.



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