Author: Nigerian Institute Of Advanced Legal Studies
Category: BUSINESS, CORPORATE & COMMERCIAL LAW
Date Published: Monday, 14-January-2019 4:21:59 PM
The reason for the passing of the Sherman Act was to combat the power of trusts. It was common for stock owners held in competing companies to transfer stocks to trustees who then controlled the activities of those competitors and consequently lessened competition between them; this is why it has become known as antitrust law in the United States. It is significant to state at this point that legislators whose votes were crucial to the enactment of these statutes cared more about the distribution of wealth, income and welfare of small businesses than they did about allocative efficiency, especially since the economic profession itself had no enthusiasm for antitrust policy. Anti-trust law developed in a series of judicial decisions in the half century following the Sherman Act in a rather ad hoc manner. This occurred as it went through an industrial revolution, i. e the Depression and the New Deal. Also in the 1950s the Structure-Conduct-Performance paradigm was developed by what is called the Harvard School, its major proponent being J. S. Bain. This led to the belief that markets were fragile and there is a need for an anti-trust policy which would intervene to protect small businesses against large firms.