While it isn’t particularly controversial that concentrated economic power was a legislative target of the Sherman Act, when read as a corollary or even an afterthought to maintaining competitive markets in the abstract, the full implications of this goal can sometimes be obscured. When instead read as part of a particular moral economy vision, we end up with a very different overall picture of the American antitrust project.


Editor’s note: The current debate in economics seems to lack a historical perspective. To try to address this deficiency, we decided to launch a Sunday column on ProMarket focusing on the historical dimension of economic ideas. You can read all of the pieces in the series here.

In The Dawn of Everything: A New History of Humanity, David Graeber and David Wengrow note that while academic and intellectual fashion has shifted decidedly against the discussion of broad historical narratives, such metanarratives—typically constructed before the tide had turned against discussing them—continue to ground and shape the more fine-grained work that does occur. 

In law, this observation applies not only to legal history proper but also to our forward-directed work. After all, law is never truly tabula rasa, even in its reform mode; prior precedents and understandings always circumscribe the possible, no matter how radical. And just as laws’ essentially normative core activity has a historical component, whether tacit or express, historical metanarratives also tend to have a normative component.

Yet, even once we recognize the inescapable influence of any particular metanarrative on present-day thought, contesting it can be a difficult task. Not only are existing narratives by definition deeply ingrained—somewhat across any given ideological spectrum—but narratives at that scale and depth always admit some degree of factual exceptions and counter-examples. Indeed, some narratives may be so deeply ingrained that contesting them may be beyond the reach of academic or intellectual work altogether. 

But what if it were possible to consciously change some of our collective myths? Specifically, what if we took seriously a historical meta-narrative that foregrounds the possibility of democratic and egalitarian relations, instead of the inevitability of sharply hierarchical and unequal ones?

That is, in a sense, the question Graeber and Wengrow ask about early recorded history and prehistory. In their rich and wide-ranging tour through time and space, they challenge the longstanding metanarrative that hierarchy always and everywhere accompanied technological progress. They don’t deny that history also contains instances of terrible subordination, cruelty, and autocracy, but they challenge the ingrained assumption that it was uniform in this regard. They also highlight a recognizable feature of current intellectual culture: the tendency to dismiss historical precedent for egalitarian reform as unscientific, romantic utopianism—even as more pessimistic views of history are presumed to be more savvy and hard-headed, and held to lower evidentiary standards.

In a recent article, I have tried to challenge a similar set of assumptions about the origins of American antitrust law. The conventional interpretation of American antitrust law’s origins has under-emphasized their pro-democratic and egalitarian tenor. This has come to pass, in part, by reading them through the analytical prism of the self-coordinating market—a theoretical construct that tends to naturalize some legal and social allocations of economic coordination rights, while casting others as deviant.   

“THE CONVENTIONAL INTERPRETATION OF AMERICAN ANTITRUST LAW’S ORIGINS HAS UNDER-EMPHASIZED THEIR PRO-DEMOCRATIC AND EGALITARIAN TENOR.”

While I do not claim that antitrust’s legal and political origins were homogenous, the legislative history of the first and foundational federal antitrust statute, the Sherman Act, indicates a legal purpose whose primary target was the concentration of economic coordination rights—as embodied, for instance, in the late nineteenth-century business trusts, which left the coordination of markets “to a few men sitting at their council board,” as Senator Sherman put it at one point—rather than economic coordination as such. While the self-coordinating market ideal can obscure this fact, the legislative history does not indicate disfavor of other, more democratic forms of economic coordination—for instance, coordination between farmers, small producers, and workers. The legislation was essentially aimed at dispersing economic coordination rights, a conclusion reinforced by earlier precedents. 

It isn’t particularly controversial that concentrated economic power was a legislative target of the Sherman Act—but when read as a corollary or even an afterthought to maintaining competitive markets in the abstract, the full implications of this goal can sometimes be obscured. When instead read as part of a particular moral economy vision—which, I argue, the evidence supports—we end up with a very different overall picture of the antitrust project. In a moral economy vision, regulation is not an afterthought or merely a corrective to market failures; recognizing that both economic coordination and its regulation are pervasive and unavoidable, the key regulatory question is between forms of economic coordination (and competition), rather than between competition and coordination, or between more or less regulation. 

Seen from this vantage, democratic economic coordination becomes the natural companion to the goal of containing domination, rather than a special exception to an anti-coordination rule. And that is exactly what it was in the nineteenth-century antimonopoly vision, grounded in a farmer-labor political constellation, that spurred federal antitrust legislation. That constellation, led by organizations like the Knights of Labor, the Grange, and the Farmers Alliance, was quite specifically a continuation and application of moral economy traditions: not just in the general sense, but also in the specific sense of the moral economy vision of 17th-18th-century England, in which the common law of restraint of trade—another key statutory antecedent—was also steeped. While the common law as a whole was of course heterogenous, with both egalitarian and hierarchical elements, the antimonopoly vision expressly embraced the twin goals of containing domination and cultivating democratic coordination. As the founder of the Grange commented, remarking on the great early success of the organization in attracting members: “‘Cooperation’ and ‘Down with Monopolies’ were proving popular watchwords.”

Legislators discussed the issue of coordination among smaller players—not only workers, but also farmers and smaller producers of all kinds. They were quite univocal that such coordination was generally socially beneficial, and that the aims of the legislation did not include curtailing it. For instance, Senator George—one of the likely authors of the final bill—objected to an earlier version of the legislation on the basis that it might be construed to penalize the “most innocent and necessary arrangements” of the very “farmers and laborers of the country who are sending their voices to the Congress . . . asking, pleading, imploring us to take action to put down trusts . . . .” Senator Sherman responded: “That is a very extraordinary proposition,” adding, “I desire to say distinctly that is not my idea or the idea of any one of the committee.”

Upon considering the possibility, the senators adopted an amendment containing a labor and farmer exemption, with no apparent controversy. But while the body was in the middle of reviewing the various previously adopted amendments at (what was then envisioned as) the culmination of the process, things took a new turn as the result of a pivotal speech given by one Senator Platt. That speech started with the claim that the labor and farmer amendment did not go far enough to immunize socially beneficial coordination among the little guys: there were small producers and dealers who would still fall outside it. Platt emphasized both the traditional ubiquity and the continuing social and economic value of horizontal coordination beyond firm boundaries, invoking the moral economy concept of just price. It is generally agreed that Platt’s speech spurred what happened next: the bill was transferred to the Judiciary Committee, which re-wrote it almost entirely into the version we know today.  

What is missing from conventional history, however, is that the best explanation for the new version of the bill (which I elaborate on in greater detail in the paper) was precisely the senators’ concern with penalizing too much “good” coordination. It stands to reason that the rewrite prompted by the Platt speech aimed to address the concerns that his speech raised. The economic coordination that legislators were generally united in supporting was not top-down control by dominant firms—often defended on efficiency grounds today—but dispersed, democratic cooperation among small players. The committee removed language targeting combinations that would prevent “full and free competition” and language that referenced advancing costs to consumers. Instead, the new bill referred to the common law of restraint of trade, a doctrine that traditionally tolerated dispersed forms of market governance that would often be condemned as horizontal price-fixing today.

The first page of the Sherman Antitrust Act of 1890.

The fact that a labor and farmer exemption was never appended to the new, rewritten bill that would become the Sherman Act has frequently been taken, in both law and historiography, to signify some basic ambiguity in legislative intent. Encouragement from the Supreme Court played a role,1 but likely so did a developing metanarrative in which the toleration and even favor of democratic economic coordination—in the farmer-labor antimonopoly coalition, in the “moral economy” origins of key antitrust doctrines, and even in the nineteenth-century restraint of trade doctrine to which the new statutory language referred—were effectively written out of antitrust history. 

Peeling back that metanarrative perhaps also makes it easier to see the more specific evidence in the legislative history that strongly suggests a calculation that reformulating the legislative directive itself would avoid the problem of an overbroad rule—making any express exemption unnecessary. We might question legislators’ drafting decisions (keeping in mind the other constraints under which they were working, such as challenges to constitutionality that more specific language might have heightened)—but whether they chose the best tactics to effectuate their goals or not, the goals themselves were not especially ambiguous. The majority of the Judiciary Committee that re-wrote the bill had also supported the labor and farmer amendment to the earlier bill (only one member of the entire Senate, Edmunds, ever raised any objection to it), and two of its members—George and Hoar—had been among its most vocal proponents (as well as confirmed supporters of labor unions generally).

This specific explanation for the use of the common law language in the statutory text also implies that, contrary to current conventional wisdom, it did not signify a broad delegation to courts to formulate antitrust policy: a “blank check,” as Judge Easterbrook has called it. The antitrust prescription that we have adopted in the current era is effectively to concentrate economic coordination rights in the (putative) service of efficiency, which is really the inversion of the legislative purpose. This shift has been closely bound up with judicial primacy in decision-making—as the strong, contemporary form of judicial primacy co-evolved with the substantive transformations we associate with the Chicago School revolution. In the paper, I argue that this inversion is not an accident. Judicial primacy in antitrust has been associated with a deflationary view of legislative process and democratic potential, according to which legislators and movements (“interest groups”) advance narrow self-interest that is already formed and not subject to revision through encounters with others in the democratic process. This deflationary view of preferences closely mirrors the foundations of welfare economics, which came to be nearly the only acceptable analytical framework for thinking about substantive antitrust rules.

This view of legislation also imports what I would call its own preferred allocation of economic coordination rights: privileging publicly defined property rights, contracts, and coordination within hierarchically organized business firms, over other publicly defined forms of economic coordination (collective bargaining by workers; so-called “cartels”; publicly set minima in contracts). Even beyond this, there is a kind of natural fit between the self-regulating market ideal and judicial primacy—sitting back and hearing controversies while delegating market coordination functions to already-powerful actors—in contrast to the more visibly active, inclusive, and perhaps even democratic administration that can be taken up by agencies like the Federal Trade Commission. 

Graeber and Wengrow repeatedly highlight one element of the metanarrative they contest: that “scale” implies hierarchy, and that therefore, as societies progress in technological and social complexity, hierarchy naturally and inevitably follows. This “myth,” if you will, is deeply baked into antitrust orthodoxy as well—so much so that “scale,” when conjoined with antitrust’s firm exemption, becomes almost synonymous with extending hierarchical organization. The biggest task facing the reform project today is to construct and facilitate alternative institutional forms—both “public” and “private”—that show that operational efficiency does not require (and is frequently impeded by) the extreme concentrations of economic coordination rights we have come to take for granted. 

Published in conjunction with the Law and Political Economy (LPE) Project.

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  1. Loewe v. Lawlor (1908).[]