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Antitrust from a Historical Perspective

May 02, 2022

At ProMarket, Prof. Hovenkamp writes about a recently unearthed memo from George Stigler and Richard Posner to the Reagan administration.

Herb Hovenkamp, James G. Dinan University Professor, recently wrote “A Posner-Stigler Smoking Gun,” for the history series of ProMarket, a publication sponsored by the Stigler Center at the University of Chicago Booth School of Business.

The following is an excerpt:

A memo from George Stigler and Richard Posner to the Reagan administration was recently unearthed. To understand the meaning behind the memo, as well as its influence, it is important to examine the context of antitrust attitudes at the time it was written.

In late 1980 law Professor Richard A. Posner and economist George J. Stigler sent an undated memorandum to Martin Anderson, an economist serving on President-elect Ronald Reagan’s transition team. Posner was a professor at the University of Chicago Law School and had already written an influential book on antitrust law. In 1981, President Reagan would nominate him to the United States Court of Appeals for the Seventh Circuit, where he finished out his career. George J. Stigler was a prominent professor of economics at the University of Chicago. His name was strongly associated with the Mont Pelerin Society and the Chicago School of economics. One of his notable contributions was to politicize the theory of economic regulation by rejecting its neoclassical foundations in favor of a theory focusing on competition among firms for government favors. Martin Anderson himself would go on to be one of President Reagan’s leading economic advisors.

Some conspiracy theorists claim that this memorandum proves a right-wing cabal to unleash American corporate power. Hardly… .

Hovenkamp holds joint faculty appointments in the University of Pennsylvania Carey Law School and in the Department of Legal Studies and Business Ethics at the Wharton School. He is a Fellow of the American Academy of Arts and Sciences, and in 2008 won the Justice Department’s John Sherman Award for lifetime contributions to antitrust law. His legal history writing includes The Opening of American Law: Neoclassical Legal Thought, 1870-1970 (Oxford, 2015); Enterprise and American Law, 1836-1937 (Harvard, 1991). His principal antitrust scholarship includes Antitrust Law (with the late Phillip E. Areeda and the late Donald F. Turner, 1978-2020).

Read the entire piece by Hovenkamp at ProMarket.