Abstract

F.M. Scherer has not effectively rebutted my subjectivist criticism of the standard microeconomic welfare model; Scherer's historical reference to what Congress (allegedly) believed is irrelevant to the theoretical concerns raised by subjectivism. Nor does my “principal” criticism of antitrust policy rests on “philosophical foundations”; my principal criticism rests on conventional economic analysis and a detailed economic history of the classic antitrust cases. My conclusion that the electrical equipment conspiracy of the late 1950s had no significant effect on market prices is supported by Ralph Sultan's findings; indeed, it is Scherer who brutally ignores the context and misrepresents the general thrust of Sultan's research. Scherer's comments on OPEC confuse the distinction that I made between private and governmental cartels.Finally, the economic welfare model that Scherer embraces so enthusiastically at the start of his review cannot be so suddenly discarded when I show something inconvenient: namely, that the “dominant firms” in the classic antitrust cases did not reduce market output and did not raise market prices. Scherer has not come to grips with my central thesis that antitrust regulation has generally been employed to restrain the competitive market process.