How Federalism Saved Antitrust

This post, my first Guest appearance at C&F (thanks, Mike!), is an inspiring holiday story of faith (partially) renewed. 

Frankly, I'm a fedSkeptic.  When fedfanatics extoll the virtues of federalism, I try and fail to name even one modern or historic politician who applies its principles consistently, rather than using it as a trump card in legislative or judicial battles.  When they rhapsodize over the States as incubators and laboratories for legislative innovation and progress, I picture intensive care units sustaining old mistakes and museums enshrining ancient prejudices.

That was until I heard Lloyd Constantine's acceptance remarks last June, when he received the American Antitrust Institute's 2004 Antitrust Achievement Award.  Constantine's remarks, The Importance of State Antitrust Enforcement, were posted Dec. 28, 2004, at the AAI website, and they present a fascinating tale of state antitrust enforcers launching a valiant and successful effort in response to the Reagan Administration's plan to dismantle and destroy the federal antitrust laws.

Here are a few excerpts from Constantine's 10-page speech, to whet your appetite:

[In 1980] antitrust was almost exclusively the province of the federal agencies and the private bar. State A.G. antitrust, at least in New York, was nowhere and not particularly needed.

In 1981 a new federal administration came to power with many new ideas. Some of these were good and successful.  One terrible idea was to destroy the regime of American Antitrust Law.

It was while confronting that specific assault on the antitrust laws from the federal agencies, that we resolved to cobble together a de facto national antitrust agency from the little state offices and to use them to save antitrust. This grand strategy was adopted by a small group of state trustbusters.

First and foremost the antitrust law was saved. To be sure the law is less powerful and beneficial than it was prior to the federal assault, but the core survived. That would not have happened without the States.

Many of the assaults on the core of antitrust law are back, merely repackaged in different forms and terms.

The Antitrust Laws are worth preserving and fighting for. It is important for State and Federal antitrust agencies to try to coordinate their efforts when possible - but it is also essential that each sovereign guard the law and maintain its prerogative to act, and if necessary to act boldly and alone. At an antitrust conference in Lawrence, Kansas in May of 1989 - we celebrated the passage of the Kansas Act of March 1889 and the true centennial of the American Antitrust Laws. On that occasion I ended my remarks with a statement which seems appropriate now: “Federalism is a system in which state and federal governments each strive to achieve the desires of their joint constituents and the goals of the American Nation. But when either side of the partnership fails to act, despite good cause, the other side must act. Federalism is not a suicide pact.”

The many details presented by Constantine are interesting and inspiring - almost enough to turn a fedSkeptic into a cautiously optimistic federale. [Learn more about antitrust enforcement by state attorneys general in the AAI Antitrust Research Guide.  Got crime on your mind?  Click here for AAI's comprehensive Criminal Antitrust Primer.]

david giacalone