With publication of Louis Brandeis: A Man for This Season by the Colorado Technology Law Journal, Jon Sallet and the Benton Foundation are offering this new series adapted from that article to demonstrate that progressive competition policy incorporated both the goals and the means that Brandeis believed would provide the strongest tools to fight against the trusts and the monopolies of his day. This series is part of an ongoing examination of how to update Brandeis—and, more importantly, antitrust—for the digital age. Jon will be presenting the key conclusions from his Brandeis article to the Federal Trade Commission, in its hearing on the Consumer Welfare Standard on November 1, 2018 and in an event hosted by the Washington Center for Equitable Growth on November 14, 2018.

Brandeis’s view of progressive governance meant that the government could improve itself and the lot of its people. The Brandeisian approach to competition has five parts; together they comprise the framework for progressive governance in the field of competition.

1. Antitrust and Social Issues

Louis Brandeis believed that legislators creating antitrust laws should consider broad economic and social issues. (I’ll go into this at much greater depth in my next article.) His goal was to combat trusts and monopoly, including the impact that he believed monopoly had on democracy and individual economic opportunity. (He viewed the two as very closely related.) Congress, in his view, was rightly motivated by concerns about the political power of the trusts when it enacted the antitrust laws.

2. Translating Social Issues Statutory Commands

Brandeis’s approach demonstrates his view that wise legislation requires legislators to translate larger social and economic concerns into a set of statutory commands designed to serve these larger social goals while operating within the scope of professional obligations familiar to antitrust enforcers and the courts. Brandeis focused on the creation of legal standards that antitrust agencies and courts could be relied upon to implement, as with the Federal Trade Commission Act’s prohibition of unfair methods of competition and the Clayton Act’s prohibition of mergers that may substantially lessen competition or tend to lead to monopoly.

The laws Brandeis proposed and supported did not ask a federal antitrust agency to decide whether a company was too politically powerful by, for example, counting the numbers of allies it had made in state legislatures. Rather, Brandeis favored standards that looked directly at economic (one might say industrial) outcomes, such as a firm’s market share or the use by dominant firms of practices like tying or exclusive contracts. His approach, in other words, was to find enforceable legal standards that identify harmful industrial conduct in a manner that vindicates social and democratic values.

3. The Institutional Approach

Brandeis’s institutional approach relied on the expertise, training, and professional responsibilities of law enforcers, lawyers, and judges to implement the chosen legal standards. These legal professionals were to apply the chosen legal standard in a manner that would vindicate the legislature’s larger social and economic goals by relying on learnings from economics and the social sciences and examining the facts in a determined and detailed manner. Brandeis did not suggest that the application of the law, once formed, should incorporate day-to-day political considerations. A legislature may properly speak to the effect it believes that corporations (or any other part of the polity) have on democracy,[i] but antitrust enforcers should not decide on political grounds which case should proceed and which should not. This is not because Brandeis believed larger goals to be unimportant—far from it.

Remember: Brandeis lived in the shadow of the substantive due process jurisprudence typified by Lochner v. New York.[ii] Not surprisingly, therefore, Brandeis believed that legislatures were authorized to cast a wide net, but that judges were not to indulge their own legislative impulses. Brandeis preferred the hard work of detailed inquiry to the easier path of unmoored theory or, as he put it himself, he favored inductive reasoning, based on facts, over what he viewed as the Lochnerian approach of reasoning “deductively from preconceived notions and precedents.”

Thus, Brandeis believed that social and economic experiments, once enshrined in legislation, are most capably administered through the rule of law, which rests upon both common-law recognition of changing circumstances and a litigator’s attention to factual detail. The right laws, in other words, would lead to the right investigations and then to the right results. As a proponent of reforming the antitrust laws, he focused on the best way to protect larger anti-monopoly and democratic goals through the identification of harmful industrial conduct. As a judge he was just as relentlessly focused on the facts that would prove, or disprove, theories of competitive harm,[iii] hewing to the common-law tradition that his fellow Justice Oliver Wendell Homes Jr. so famously embraced.

4. The Role of Competition

Where competition could succeed, Brandeis thought competition was the best answer. But he was creative in thinking of ways to improve such sectoral regulation when competition could not be expected to flourish.[iv]

Brandeis clearly recognized the importance of sectoral laws regulating, for example, railroads, local telephony, and natural gas. He favored such regulation where he believed a function was inherently that of a monopoly, such as a local water company, but he also saw circumstances in which competitive industries, such as railroads, should be subject to such regulation. He actively participated in regulatory battles concerning gas companies and railroads throughout his time in private practice, culminating in his appointment as a special counsel to the Interstate Commerce Commission (ICC) shortly before he was appointed to the Supreme Court. Compared to antitrust law, sectoral regulation is narrower in scope but much more detailed and expansive within its jurisdictional limits. Indeed, when railroads sought rate increases from the ICC, Brandeis dug deep into their management practices precisely because he believed that sound regulation required such intensive scrutiny. Where applicable, Brandeis saw government regulation, as Justice Stephen Breyer has said, “as a weapon to help the ordinary citizen, worker, or consumer.”

The distinction between antitrust law and regulation was at the heart of Brandeis’s views about the 1912 presidential election, “which turned on who spoke most directly to U.S. anxieties over the economic relationship among economic prosperity, democracy and power.” Brandeis publicly and decidedly favored Woodrow Wilson’s stance of vigorous action against monopoly over Theodore Roosevelt’s “New Nationalism,” which Brandeis believed was far too willing to accept the existence of monopoly. A few days before the 1912 election, Brandeis depicted Theodore Roosevelt as favoring the legalization of monopoly in opposition to Woodrow Wilson’s view that “private monopoly in industry is never desirable, and is not inevitable.” Brandeis did not, in other words, favor Big Government as the first solution to Big Monopoly. Rather, he believed that sectoral regulation should be used when justified by specific industry circumstances, such as the existence of local utility monopolies, or in circumstances in which normal competitive forces could not get the job done.

5. The Spirit of Experimentation

Competition policy, both antitrust and sectoral regulation, is to be informed by a spirit of experimentation. Brandeis believed that monopolies were bad for industrial innovation, thus directly incorporating innovation into his antitrust thinking. But even more than that, Brandeis’s view of progressive governance in the realm of competition policy should be understood as an embrace of experimentation, with innovation customized to further the distinct institutional and professional roles that government processes advance. Brandeis was, after all, the inventor of the “Brandeis brief.”

Continuing the Experiment

Louis Brandeis viewed America itself as an experiment. This was not a unique metaphor, but it captured Brandeis’s philosophy of government—that America was built on a unique set of principles, that its tools of democratic governance formed the fulcrum on which those principles could be vindicated and extended, and that the work of seeking democratic and economic progress would never be done. We cannot know what Brandeis would have instructed us to do today except, perhaps, to know that he would have urged us to do better.

Benton, a non-profit, operating foundation, believes that communication policy - rooted in the values of access, equity, and diversity - has the power to deliver new opportunities and strengthen communities to bridge our divides. Our goal is to bring open, affordable, high-capacity broadband to all people in the U.S. to ensure a thriving democracy.

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