When Economics Faces the Economy: John Bates Clark and the 1914 Antitrust Legislation

Fiorito, Luca

doi:10.1080/09538259.2013.737129

Cited by 11 publications

(3 citation statements)

References 17 publications

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“…Corporate mergers on a truly unprecedented scale (Lamoreaux 1985; Sanders 1999) served as the backdrop for Knight’s claim that uncertainty was the main driver of business concentration (RUP, 244), joining an emerging corpus of theories of the firm (Langlois and Cosgel 1993, 456). These new theories looked to balance the dangers of monopolization against the benefits of scale and coordination in an era of mass production and often destructive competition (Fiorito 2013; Rutherford 2015; Sawyer 2018).…”

Section: Doing and Timementioning

confidence: 99%

Uncertainty, Profit, and the Limits of Markets

Hirsch

2021

Political Research Quarterly

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The neoclassical market model is the overwhelming basis for contemporary views of markets as fair, efficient, or both. But is it an appropriate starting point? The article draws on Frank Knight’s 1920s work on the economics of uncertainty to show that the ideal of perfect competition conceals a tacit trade-off between equality and certainty. Largely undetected, this trade-off continues to govern financialized capitalist democracies, evading normative and political debate. By explaining how markets and firms resolve the problem of uncertainty, Knight shows that all supposed market benefits, even allocative efficiency, are not costless to society. More specifically, Knight argued that modern markets are premised on a tacit agreement between a handful of “daring” entrepreneurs and the “risk-averse” public: the former agree to carry the uncertainties of business-life in return for a substantially larger share of its power and rewards. Despite the highly static assumptions of neoclassicism, therefore, and its linked assumption of perfect knowledge, uncertainty is far from absent in modern economics. It is built into firms and markets and manifests itself as a steep social and material hierarchy.

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Section: Doing and Timementioning

confidence: 99%

Uncertainty, Profit, and the Limits of Markets

Hirsch

2021

Political Research Quarterly

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“…He later reversed this position, advocating something that he termed “potential competition”—the idea that if monopoly powers abuse their own position by raising prices above competitive levels, new competitors will take advantage of unnaturally high prices by offering more competitive rates. Clark’s influential argument helped to protect business interests against demands for stricter antitrust polices (see Morgan 1993; Leonard 2003; Fiorito 2013).…”

Section: A Fair Wage For a Fair Day’s Pay?mentioning

confidence: 99%

The Elusive Rentier Rich

McGoey

2016

Science, Technology, & Human Values

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The popularity of Thomas Piketty’s research on wealth inequality has drawn attention to a curious question: why was widening wealth inequality largely neglected by mainstream economists in recent decades? To explore and explain that neglect, I draw on the writing of the early neoclassical economist John Bates Clark, who introduced the notion of the marginal productivity of income distribution at the end of the nineteenth century. I then turn to Piketty’s Capital in order to analyze the salience of marginal productivity theories of income today. I suggest that most of the criticism and praise for Piketty’s research is focused on data that are accessible and measurable, obscuring attention to questions over whether current methods for measuring economic capital are defensible or not. My overarching aim is to explore how “absent” data in economics as a whole help to reinforce blind spots within mainstream economic theory.

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“…That is to say, how did the new science of economics converge with political constraints and public opinion during the early years of the Wilson administration, enhancing a managerial approach to efficiency in the American society of 1914, including in public management practices with respect to the regulation of competition? In this contribution, we contrast the ideas and concepts of academic economists about antitrust regulation, competition, and fairness with letters written to the Wilson administration by citizens from all walks of life during the spring and summer of 1914 (Clark, 1914; Fiorito, 2013; Schumpeter et al, 1914). Our aim is to see how management, both as a practice and as a response to new socio-economic issues, stole a march on theoretical economic knowledge.…”

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confidence: 99%

How the Drafting of the Clayton Antitrust Act Helped Spread the Managerial Approach to Efficiency

Agulhon

Mueller

2022

Administration & Society

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Managerial sciences are generally considered to be the art of efficiently running business. Their influence, though, extends far beyond the corporate sphere and they play an important part in public administration and in particular in its dialog with society at large. Here, from the viewpoint of historical institutionalism, we document one of the earliest successful examples of the wider application of management science: the 1914 antitrust rules (the Clayton Antitrust and Federal Trade Commission Acts) from the perspectives of economic scholars as technical experts, the early years of the Wilson administration, and the spheres of business and society. The societal debate about business and efficiency and the successive implementation of scientific managerial ideas in the administrative sphere, saw management science permeate the whole of American society and become an almost irrefutable aspect of everyday life and representations, thereby enabling it to spread well beyond the boundaries of the firm. Evidence for Practice From a Science, Technology and Society (STS) perspective, managerial thinking extends far beyond technical debates or shared practices. Efficiency plays a dual role as a value and as a criterion of the optimal use of resources, which should be incorporated into public policy design with respect to business regulation. Negotiation between public administration and social actors is multidimensional and requires identifiable and accountable leaders. Clayton Antitrust legislation emergence can bring some return on experience to current debates about Digital Market Act at European Union level.

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When Economics Faces the Economy: John Bates Clark and the 1914 Antitrust Legislation

Cited by 11 publications

References 17 publications

Uncertainty, Profit, and the Limits of Markets

Uncertainty, Profit, and the Limits of Markets

The Elusive Rentier Rich

How the Drafting of the Clayton Antitrust Act Helped Spread the Managerial Approach to Efficiency

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