The Chicago School of antitrust claims that it made a major contribution beginning in the late 1970s to making antitrust policy coherent and “scientific” by introducing basic economic concepts. It both advanced the Consumer Welfare Standard (a normative economic theory to segregate legitimate economic competition goals from “value judgments”) and a basic positive microeconomic theory to show how much of the conduct previously considered anticompetitive was justified on “efficiency” grounds. Their contributions had a major impact on the federal judiciary in the United States and the antitrust enforcement agencies as well, who spread Consumer Welfare throughout the globe. The Post-Chicago School economists have not challenged the Consumer Welfare Standard. Instead, the Post Chicago School has asserted that Consumer Welfare Standard is redeemable—correctable for many of the overstatements and conservative political conclusions of the Chicago School. Proponents of the Post Chicago School are fond of advancing the narrative that, in the late 1980s and during the 1990s, major advancements occurred in industrial organization economics: Many of the earlier Chicago School conclusions required assumptions that were not evident from the Chicago School economists and often not typical of the factual situations under scrutiny in antitrust cases. In the last decade a third school of antitrust scholars, the New Brandeisians, perhaps drawing from literature ignored during these waves of economic theory, have made major headway in antitrust circles.The “New Brandeisians” accept the advances of the Post Chicago Economists, but challenge Post Chicago scholars’ devotion to the Consumer Welfare Standard, their understanding of antitrust history, and instead advocate that competition policy can address the traditional antitrust goals of political democracy and support for small business. They further claim that antitrust enforcement should be used to protect labor and to address inequality when it is being exacerbated by a traditional antitrust violation.Post Chicago scholars have not been embracing of the New Brandeisians. Several papers by Post Chicago scholars have emphasized that the New Brandeisians do not sufficiently adopt economic theory. Post Chicago scholars claim that, on economic grounds, they are the clear winners of this competition between competing analytical approaches because only they are faithful to the latest developments in industrial organization. For example, in a recent paper Jonathan Baker, contrasting himself with the New Brandeisians states that “By contrast, post-Chicagoans embrace economics. Centrist reformers see economic analysis and economic evidence as essential for making the case for stronger antitrust rules and enforcement…”In this paper, we claim that economic theory—not just the sub discipline of industrial organization-- supports the New Brandeisians. Specifically, modern welfare economics warrants the abandonment of the Consumer Welfare Standard as antiquated and deeply and irrevocably flawed.Moreover, economic history provides empirical evidence that the goals of the New Brandeisians will benefit the economy as a whole. While Post-Chicago claims about the limitations of the Chicago School are largely accurate, they limit economic theory to industrial organization--applied microeconomics. Economics as a discipline is much broader and richer than these Consumer Welfare Standard advocates let on. By ignoring the larger discipline in economics and the advances that have taken place, Antitrust discourse has been impoverished. The effect has been to cast the New Brandeisians as the outliers in terms of economic understanding, when it is the case that they are the only school to have the bulk of economics on their side
