LETTERS OF TRANSMITTAL To Members of the Joint Economic Committee: JANUARY 25, 1960. Submitted herewith for the consideration of the members of the Joint Economic Committee and others is Study Paper No. 22, "An Evaluation of Anti-Trust Policy: Its Relation to Economic Growth, Full Employment, and Prices." This is one of a number of subjects which the Joint Economic Committee has requested individual scholars to examine and report on in connection with the study of "Employment, Growth, and Price Levels." The findings are entirely those of the author, and the committee and the committee staff indicate neither approval nor disapproval of this publication. PAUL H. DOUGLAS, Chairman, Joint Economic Committee. JANUARY 21, 1960. Hon. PAUL H. DOUGLAS, Chairman, Joint Economic Committee, DEAR SENATOR DOUGLAS: Transmitted herewith is one of a series of papers being prepared for the "Study of Employment, Growth, and Price Levels" by outside consultants and members of the staff. The author of this paper is Theodore J. Kreps, of Stanford University. All papers are presented as prepared by the authors. OTTO ECKSTEIN, Study of Employment, Growth, and Price Levels. V CONTENTS I. What is the meaning of antitrust policy. II. Diversity of views concerning its impact. 1. Antitrust policy potentially and actually beneficial. German cartel advocates disagree.. Prewar regimes in France, Italy, and Japan disagree_ Antitrust policy and totalitarianism__. 2. Antitrust policy beneficial if adequately enforced. VII Resurgence of resistance to antitrust laws after World III. Is the relation to antitrust policy to economic growth, employment, Direct performance relationships not measurable_ Indirect measurement via impact on structure_ IV. The relation of antitrust policy to economic growth.. V. The relation of antitrust policy to 'full" employment.. Labor unions and the antitrust laws. AN STUDY PAPER NO. 22 EVALUATION OF ANTITRUST POLICY: ITS RELATION ΤΟ ECONOMIC GROWTH, FULL EMPLOYMENT, AND PRICES (By Theodore J. Kreps) INTRODUCTION The task of evaluating the relation of antitrust policy to economic growth, full employment, and prices involves at least five major sets of puzzling problems. First, what is meant by antitrust policy? Is it the policy set forth in Supreme Court decisions, in political oratory, and in classical economic theory? Is it the policy actually legislated, as amended and interpreted with many statutory exemptions ranging from agriculture to Webb-Pomerene export cartels? Is it the antitrust policy that resulted de facto when for decades at a time enforcement activity and funds were negligible? Is it the policy set aside in time of war and at other times countervailed by administrative agencies such that in many areas even the Government has become a promoter of monopoly? Or is it a mosaic of all these fragments of theory and practice? Second, does any relation exist between antitrust policy, however defined, and economic growth, full employment, and prices? If so, why is it rarely given a mention as a causative factor, indeed almost never listed as significant either in the economic literature analyzing the reasons for economic growth, or in the texts on employment theory, or in treatises on money and prices? If such a relation does exist, is it measurable? Since growth, employment, and prices represent performance tests, does data exist sufficient to assess what the relation might be in the operations of individual firms, particular industries, diverse national economies and societies? How isolate its impact at these levels from that of more powerful forces that affect economic growth, employment, and prices? Can "controls" be found, that is, actual convincing evidence what growth, employment, and prices might have occurred had there been no antitrust policy as such? Third, what is economic growth? Is antitrust policy one of the major forces operative historically and at present in well-developed and underdeveloped economies? Do rates of growth vary with enforcement activity between different periods of time within the United States or between exempt and nonexempt industries or between various Western economies in recent periods with and without antitrust policy? Are statistics available? Even if they were can any such comparisons be justifiably made? Do they yield definitive results? 1 50037-60-2 |