Law Commons^™

The Law Of Vertical Integration And The Business Firm: 1880-1960, Herbert J. Hovenkamp

All Faculty Scholarship

Vertical integration occurs when a firm does something for itself that it could otherwise procure on the market. For example, a manufacturer that opens its own stores is said to be vertically integrated into distribution. One irony of history is that both classical political economy and neoclassicism saw vertical integration and vertical contractual arrangements as much less threatening to competition than cartels or other horizontal arrangements. Nevertheless, vertical integration has produced by far the greater amount of legislation at both federal and state levels and has motivated many more political action groups. Two things explain this phenomenon. First, while economists …

The Antitrust Movement And The Rise Of Industrial Organization, Herbert J. Hovenkamp

All Faculty Scholarship

The modern science of industrial organization grew out of a debate among lawyers and economists in the waning years of the nineteenth century. For Americans, the emergent business "trust" provoked a dialogue about how the law should respond. Many of the formal theories of industrial organization, such as the ruinous competition doctrine, the potential competition doctrine, and the post-classical concern about vertical integration, were actually borrowed from the law.

Anglo-American and European economists disputed the proper domain of theory and description in economic analysis. The British approach was exemplified Alfred and Mary Paley Marshall's Economics of Industry, published in …