The Changing Economics of the Supreme Court

Abstract

QUR anti-trust legislation and the court decisions based thereon have been accused of thwarting economic development. At the same time, economic forces have had a profound effect on the law and its judicial interpretation. The relation between law and economics is reciprocal. Economic doctrines can be read into the Supreme Court decisions, but it would be precarious to claim that the Court has followed any theories consistently. Though it has certain predilections for logic, precedent and consistency, the Supreme Court is essentially pragmatic, making our government, after all, one of men rather than laws. Recently the Federal Supreme Court has well-nigh nullified the Sherman AntiTrust Law recognizing the efficiency of combines and even monopolies. The period before the Industrial Revolution has been described as one of undersupply and starvation, the nineteenth century as a period of oversupply and uncoiordinated production, while in the twentieth century the limited markets and excess productive capacity are becoming pressing problems. Attempts are being made to coordinate supply and demand, to eliminate the ruthless competition between businesses, in short, to stabilize.' Congress has recognized this trend by the exemptions from the anti-trust laws which it has given in whole or in part to banks, railroads, farmers, horticulture, foreign trade associations, and so forth. In fields not touched by this legislation the Supreme Court has by a process of inclusion and exclusion changed the original rigid interpretation of the Sherman Law so that today mergers, combines and perhaps even monopolies are permitted and welcomed. This reversal is due to the Court's knowledge and understanding of the efficiency in production and distribution of large scale organizations as well as their stabilizing effects. In the early history of the Sherman Law the Supreme Court was given to the laissez faire doctrine which, driven to its logical conclusion, assumed that the smaller the business units the more satisfactory the social result. Any combination, by eliminating some competition, was outside the public interest. This extreme individualism of the Court is partially explainable by the wording of the Sherman Law, namely, that every contract and combination in restraint of trade