Antitrust in Europe: National Policies after 1945

This is the second in a series of three lectures entitled "Antitrust in Europe" delivered at the University of Chicago Law School in the autumn of 1958.1 The first lecture was devoted to the social economic, political, and legal environment in Europe during the period 1915-1945, on the premise that a fairly thorough discussion of that environment was essential to any understanding of public policy toward monopolistic phenomena and practices. That lecture supported the following conclusions: The three decades comprising the two World Wars may be characterized as an era of cartelization. This reaction against the ideas of economic liberalism which had originated in that same part of the world one hundred and fifty years earlier was motivated by a number of powerful factors: the great wars, the depressions, economic philosophies of the stagnationist variety, political ideologies of a totalitarian ilk, and a widespread pessimism resulting from the realization that whoever won the first war, Europe as a whole lost. Wartime mobilization efforts fostered a climate of restriction and regulation which lingered on well into the twenties. That decade, less than roaring in most nations of Europe, was followed by the Great Depression, which even in this country temporarily fostered a cartel system, the NRA. Stagnationists and pessimists alike preached the merit of holding on to what one already had: any change was probably for the worse. Nazis and fascists sponsored the corporate state, in which each sector of the economy was governed by cartels or similar groups. Other nations found themselves grasping after public and private regulatory schemes in self-defense against the economic warfare of totalitarian states. Cartelization reached a logical climax in World War II. During this era businessmen were prone to talk about the stabilization of markets and the rationalization of industries on a collective basis, and about the necessity of avoiding the wastes of competition. Free enterprise did not signify in Europe a business economy inside of which freedom prevailed, but stood for the desire of business to keep the government from exercising public control over economic life. Labor in most countries, while blasting monopolies and cartels as evils of capitalism, welcomed them as ultimately facilitating the "expropriation of the expropriators." Conservatives and socialists alike stood for regulation (the quarrel was merely who was to regulate whom), while liberals in rank and influence represented a lost generation. Such a background was not conducive to radical departures in the field of monopoly policy. In Britain the common law doctrines against monopolization and restraint of trade had had their teeth pulled before World War I, and in the inter-war period that nation, as well as those on the continent, abided by the principle of Roman Law emphasizing the sanctity of any contracts not clearly criminal in nature. Statutes against unfair competition were directed against such practices as bribery and misleading advertising rather than against monopolistic practices. In some respects the environment thus depicted has undergone significant change in the last ten or fifteen years. Appreciating the dangers of generalization, one may still characterize the change as representing a renewal of economic liberalism.