… is from page 7 of the late Columbia University economist Donald Dewey’s 1974 paper “The New Learning: One Man’s View,” which is the introductory chapter to the pioneering 1974 volume edited by Harvey Goldschmid, H. Michael Mann, and J. Fred Weston, Industrial Concentration: The New Learning:
Personally, I have never been one to depreciate the concern of so many economists with the problems of monopoly power. However, I have always been puzzled by the tendency to search for monopoly in concentration ratios rather than in the myriad of entry restrictions embodied in federal, state, and local legislation.
DBx: Pictured here is Airlie House, which is in Warrenton, Virginia. Airlie House serves as a conference center. It was the site of a famous and influential conference in early March 1974 of antitrust scholars. These scholars were among those who successfully exposed the economic fallacies embodied in the so-called “structure-conduct-performance” approach to industrial-organization economics. The SCP model – rooted as it is in the theory of perfect competition – prompted those who used it to endorse active antitrust interventions into the economy.
The research of scholars in the “new learning” tradition thankfully helped to toss SCP theorizing into history’s trash bin – or so we naively believed, as a new breed of antitrust activists are today on the rise and in positions of power. Members of this new breed are utterly ignorant of history, intellectual and economic. And they are just as ignorant of economics.
We need a new “new learning.” Or, rather, we need to apply the new learning represented at Airlie House nearly 50 years ago to the fallacy-filled assertions made today about antitrust and industry structure, conduct, and performance.