Some Inconvenient Truths About Antitrust Law and Economics

For years those teaching and writing about antitrust law have stressed three basic goals -- consumer surplus, allocative efficiency, and productive efficiency. Rarely, if ever, are the limitations of those goals revealed to readers. For example, in determining costs of production, external costs are not accounted for. This means that the firm most able to externalize its cost by one means or another will appear to be the more efficient and will be given broad leeway as far as avoiding liability. The Essay discusses this and other problems inherent in the goals set out for antitrust law