Balancing Unquantified Harms and Benefits in Antitrust Cases Under the Consumer Welfare Standard

Abstract

William Howard Taft—the most under-appreciated constitutional figure since George Mason, the father of the Bill of Rights—is no doubt best known as the 27th President, but his most significant contributions to our constitutional order came as Chief Justice. The federal judiciary today is the federal judiciary Taft gave us. During his tenure as Chief Justice, Taft convinced the Congress to create the Judicial Conference as the governing body of the federal courts; give the Supreme Court its own building; and, in the Judiciary Act of 1925, eliminate most of the Supreme Court’s mandatory jurisdiction.¹ These reforms bolstered the independence of the federal judiciary, and permanently elevated its role in our society. 

Taft also made important contributions to antitrust, both as a judge² and during his time as president. Although his predecessor, Teddy Roosevelt, is remembered as the “trustbuster,” Taft’s administration brought nearly twice as many cases in half the time.³ As Jeff Rosen explains in his excellent brief biography of Taft, TR and his successor had diametrically opposed ideas about how best to assure the competitiveness of markets.⁴ Roosevelt championed a regulatory model, with strict federal oversight of large corporations.⁵ Taft favored a law enforcement model, with aggressive prosecution of anticompetitive conduct, bearing in mind that “[m]ere size is no sin against the law.”⁶ In my view, Taft’s approach was preferable and has been vindicated over the course of the last century. The regulatory model would have substituted the discretion of regulators for the decisions of risk takers, with distortionary and welfare-reducing effects. The law enforcement approach, by contrast, protects competition while adhering to the rule of law.⁷ In this Article I hope to continue in Taft’s reformist footsteps by suggesting some additional tools antitrust enforcers and courts can use to make coherent, evidence-based decisions in the face of measurement difficulties.