| Albert A. Foer
Competition Policy
One of American history’s most notorious battles over a Supreme Court appointment occurred one hundred years ago, when President Woodrow Wilson nominated Louis D. Brandeis to the US Supreme Court. Whether the conservative opposition was merely anti-Progressive (Brandeis being a key designer and advocate of Progressive politics, with Wilson’s ear), anti-Semitic, or some combination, may not make much difference today. Brandeis was in fact relatively conservative in his private life, even a prude by some measures, and he had built himself into one of the wealthiest private lawyers in the nation, serving many corporate clients.
On the other hand, at the same time this proper Bostonian earned the reputation as the country’s pioneering public interest attorney and a leading social innovator. His formulation of the deeply researched “Brandeis Brief” created a new tool for advocacy. He invented savings bank life insurance to help the poor gain economic security. He co-authored the idea that privacy invasion can be a tort. When, from 1905-1913, he opposed the powerful New Haven Railroad, Brandeis became known as “The People’s Attorney.” No wonder conservatives worried about what he might as a Justice of the Supreme Court.
Brandeis’ long service on the Court from 1916-1939 was indeed momentous. Teaming up with Oliver Wendell Holmes, he helped create the modern law of free speech, starting with dissenting opinions that are still quoted and which became standards not only in the Constitutional canon but also in the canon of legal literature.
While his impact on antitrust law has not been as great, Brandeis’ well-developed philosophy in support of small government and the states as laboratories, his faith in the benefits of decentralized power, both public and private, his advocacy for independent businesses, and his insistence on transparency– all continue to play a role in the on-going debates over the goals of antitrust and regulation.
Most relevantly, Brandeis provided an enduring vision that never died and today is being revitalized: the vision that great size is very often inconsistent with both democracy and economic efficiency. Today’s popular concern with “Too Big to Fail” banks would have struck him as only the beginning of the necessary agenda. First, the critique of great size should not be limited to financial institutions. Second, the problem, he would say, goes beyond the risk of economically contagious failure. It also involves being too powerful to leave rivals a level playing field, too big to be managed efficiently, and too overbearing for a culture that values the dignity and value of the individual.
As one of the supporters of the 1914 Federal Trade Commission Act, Brandeis would undoubtedly cringe at the way modern antitrust enforcement has distorted the Act’s proscription of “unfair methods of competition” by changing the normative focus on fairness into the Chicago School’s almost single-minded focus on efficiency. Brandeis would argue, as his followers still do, that while economic analysis and competitive prices are surely important, antitrust is about more than economics. There are political and social objectives as well.
Although enforcement of the antitrust laws during the past generation has obviously not followed the Brandeisian model, and our understanding of economics has in many ways become more sophisticated, we should take this anniversary occasion to be grateful that the inspiration of Louis D. Brandeis remains as a beacon for a more just economy.
Bert Foer is the founder and and a senior fellow of the American Antitrust Institute.
