Classical perspective Competition law



under doctrine of laissez-faire, antitrust seen unnecessary competition viewed long-term dynamic process firms compete against each other market dominance. in markets firm may dominate, because of superior skill or innovativeness. however, according laissez-faire theorists, when tries raise prices take advantage of monopoly position creates profitable opportunities others compete. process of creative destruction begins erodes monopoly. therefore, government should not try break monopoly should allow market work.



john stuart mill believed restraint of trade doctrine justified preserve liberty , competition.


the classical perspective on competition agreements , business practice unreasonable restraint on individual liberty of tradespeople carry on livelihoods. restraints judged permissible or not courts new cases appeared , in light of changing business circumstances. hence courts found specific categories of agreement, specific clauses, fall foul of doctrine on economic fairness, , did not contrive overarching conception of market power. earlier theorists adam smith rejected monopoly power on basis.



a monopoly granted either individual or trading company has same effect secret in trade or manufactures. monopolists, keeping market under-stocked, never supplying effectual demand, sell commodities above natural price, , raise emoluments, whether consist in wages or profit, above natural rate.



in wealth of nations (1776) adam smith pointed out cartel problem, did not advocate specific legal measures combat them.



people of same trade seldom meet together, merriment , diversion, conversation ends in conspiracy against public, or in contrivance raise prices. impossible indeed prevent such meetings, law either executed, or consistent liberty , justice. though law cannot hinder people of same trade assembling together, ought nothing facilitate such assemblies; less render them necessary.



by latter half of 19th century had become clear large firms had become fact of market economy. john stuart mill s approach laid down in treatise on liberty (1859).



again, trade social act. whoever undertakes sell description of goods public, affects interest of other persons, , of society in general; , conduct, in principle, comes within jurisdiction of society... both cheapness , quality of commodities effectually provided leaving producers , sellers free, under sole check of equal freedom buyers supplying elsewhere. so-called doctrine of free trade, rests on grounds different from, though equally solid with, principle of individual liberty asserted in essay. restrictions on trade, or on production purposes of trade, indeed restraints; , restraint, qua restraint, evil...









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