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Competition Policy and the Economic Approach

Competition Policy and the Economic Approach

Foundations and Limitations

Edited by Josef Drexl, Wolfgang Kerber and Rupprecht Podszun

This outstanding collection of original essays brings together some of the leading experts in competition economics, policy and law. They examine what lies at the core of the ‘economic approach to competition law’ and deal with its normative and institutional limitations. In recent years the ‘more economic approach’ has led to a modernisation of competition law throughout the world. This book comprehensively examines for the first time, the foundations and limitations of the approach and will be of great interest to scholars of competition policy no matter what discipline.

Chapter 17: On the (a)political Character of the Economic Approach to Competition Law

Josef Drexl

Subjects: economics and finance, competition policy, law - academic, competition and antitrust law


Josef Drexl 1. INTRODUCTION It is often claimed that the economic approach to competition law is of an ‘apolitical’ nature. The argument is that the objectives of promoting economic efficiency and consumer welfare are incontestable and, hence, bring economic rationality to the application of the law. Accordingly, it seems that these criteria can also be applied for distinguishing between rational ‘competition policy’ on the one hand and unjustified ‘industrial policy’ on the other hand. Yet the characterization of the economic approach as ‘apolitical’ has its opponents. Already in 1980, Posner, as one of the leading advocates of the economic analysis of law, was accused by Dworkin (1980: 211–212) to promote purely ‘protestant’ political values – thereby excluding altruistic ones – behind the veil of the goal of wealth maximization. In the field of competition (antitrust) law such allegations are particularly addressed to the Chicago School, which, based on the two criteria of efficiency and consumer welfare, claims for itself an apolitical character (cf. Hovenkamp 1985: 231–232 as an opponent of Chicago) but is accused of promoting a political and even ideological agenda (Fox 1986). This criticism, of course, may not necessarily apply to more sophisticated schools of economic thinking in competition policy, like the Post-Chicago School, which, nevertheless, accepts the goals of efficiency and consumer welfare. The following analysis will take a broader approach to the question of how (a)political the economic approach to competition policy actually is. The general assumption is that any law in itself is ‘political’...

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