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IN OUR LAST ARTICLE IN THIS SERIES ON AARON DIRECTOR AND the Origins of the Chicago School, we began our study of the Antitrust Project, co-led by Aaron Director and Edward Levi from 1953 to 1957, which laid the foundations for the Chicago School of Antitrust.1 In previous articles, we introduced the four talented research associates Director and Levi recruited to work on their project: William Letwin, Robert Bork, Ward Bowman, and John McGee, all four of whom went on to successful careers as academics and whose work continues to shape our understanding of antitrust law and economics.
In this article, we continue by reviewing studies these four completed, under Director and Levi's direction, of business practices that courts had long viewed as suspect under the antitrust laws: vertical integration, predatory pricing, price discrimination, resale price maintenance, and tying. We will then review an article Director and Levi wrote near the end of the project laying out their agenda for further research, which others characterized as the "manifesto" of the Chicago School.2 This will set the stage for our next series of articles on the Chicago School Reformation. In those articles, we will first examine the continuing work done by other scholars at Chicago, who built on the foundation the Antitrust Project laid, and will then show how Robert Bork, Ward Bowman, and a new generation of Chicagoans began spreading the teachings of Aaron Director and his disciples to the broader antitrust community.
The Business Practices the Antitrust Project Studied
In our last article, we discussed William Letwin's articles on the early history of the Sherman Act. We will now review the articles Bork, Bowman, and McGee wrote reporting on the results of their studies into five business practices (or, as Levi had called them, "abuses") which had long been viewed as suspect under the antitrust laws.3
Robert Bork, Vertical Integration and the Sherman Act: A Legal History of an Economic Misconception4
When the Antitrust Project began in 1953, there were already a number of recent studies on vertical integration.5 Bork acknowledged that these earlier studies had already discussed "the economics of the subject . . . rather fully," so that he felt it necessary only to provide a short summary of what they had...