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Reviews in American History 30.4 (2002) 639-645

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What Did Happen to the Antitrust Movement?

Jason Scott Smith

Wyatt Wells. Antitrust and the Formation of the Postwar World. New York: Columbia University Press, 2002. x + 276 pp. Notes, essay on sources, and index. $32.50.

In January 1964, historian Richard Hofstadter asked a simple question: "What happened to the antitrust movement?" 1 Hofstadter posed this query in a conference paper he delivered to an interdisciplinary meeting held at the University of California, Berkeley, on the links between business, politics, and society. Reviewing the history of antitrust from the late nineteenth century to the postwar era, Hofstadter sought to understand its decline in popularity. Exactly how, he wondered, did the antimonopoly impulse that had once burned so brightly seem to fade away? For Hofstadter, the answer lay in the transition experienced by the American social order during the early twentieth century. In the late nineteenth century, antitrust was an ethical question that had spurred a popular movement for greater social justice, provoking much public debate about the moral and political viability of large combinations of firms. With the restructuring of social and economic life around more complex organizations, however, antitrust became a technical issue to be managed by experts empowered by a federal bureaucracy. Over time, then, concerns about the legitimacy of big business were gradually uncoupled from a broader public consciousness. Or, as Hofstadter famously put it, "once the United States had an antitrust movement without antitrust prosecutions; in our time there have been antitrust prosecutions without an antitrust movement." 2

In his new study of antitrust policy, historian Wyatt Wells has a fresh response to Hofstadter's question: What happened to the antitrust movement was that it looked abroad. While Wells concurs with Hofstadter's generalization about the decline of public interest in antitrust, he departs from Hofstadter's account by highlighting the effective wartime and postwar strategies pursued by the reformers at the forefront of the antitrust movement. Faced with the prospect of becoming intellectually irrelevant, thanks to the growing hostility to the New Deal during the late 1930s and the imperatives presented by World War II, these reformers managed not just to [End Page 639] survive, but to thrive. Concerned with what Louis Brandeis had earlier called "the curse of bigness," these lawyers and economists acquired and exercised a substantial measure of political power, Wells argues, by focusing on the problem of international cartels (pp. 2-3). Inspired by the colorful Wyoming native Thurman Arnold, who ran the Antitrust Division of the Department of Justice from 1938 to 1943, antitrust experts avoided the end of reform at home by concentrating their energies overseas. They became important players in the postwar reconstruction of the German and Japanese economies, working to contain and eliminate collusion among firms. Through their efforts, Arnold's protégés shaped the economic and political terrain of competition for American and foreign companies in such industries as chemicals, oil, and steel.

Wells's main contribution lies in the elegant definition of his topic. By taking policy-making about international cartels as his focus, he joins a very short list of scholars who have written about these arrangements and their implications for business-government relations. 3 Wells's rich account provides a deep understanding of how antitrust has quietly shaped much of the postwar political economy. In two brief opening chapters, he presents a lucid review of international cartel activity between 1890 and World War II, exploring how this history shaped the actions taken by the antitrust movement. For smaller and medium-sized firms faced with the economic uncertainty of the business cycle and the competitive advantages of larger companies, formal agreements to control prices and divide up markets made sense. Economists, however, have often stressed the instability of cartels, arguing that widespread cheating and inadequate enforcement mechanisms caused them to fail quickly. In response, Wells points out that many cases in the historical record have trumped economic theory, noting that some cartels, such as those governing steel and chemicals, lasted for decades (p...


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