Thank you to Karen, Dan, and Mitra for inviting me to
participate in the Legal History Blog.
To get started, I want to introduce what I’ve been working
on for the better part of a decade, my recently published book, American Fair Trade: Proprietary Capitalism, Corporatism, and the "New Competition," 1890-1940 (CUP, 2018). I began this research project in graduate school at the
University of Virginia and, in another post, I plan to discuss how I came to
this topic. I’ll also offer some advice to graduate students looking for
dissertation topics. Today, however, I’d like to tell you a bit about the book
and then reflect on writing in two disciplines – legal history and business
history. Interdisciplinary work posed some methodological challenges but also
opened opportunities for analytical reinterpretation of historical events. For
historians of regulation, it seems critical to incorporate both the social
scientist’s approach to business history and the institutionalist perspective
present in legal historian’s methods.
American Fair Trade
argues that trade associations of independent proprietors acted as regulatory
intermediaries between individual firms and government agencies in the fifty
years before World War II. In doing so they facilitated the growth of the
administrative state and altered the legal meaning of “fair competition.”
Rather than viewing the history of American capitalism as the unassailable
ascent of large scale corporations and free competition, American Fair Trade shows that trade associations lobbied and
litigated to reshape antitrust law to their benefit. Cooperation among
businesspeople and state regulators legitimized codes of fair competition that
prohibited certain business practices, such as sales below cost or secret rebates,
and standardized production and retailing specifications. New Deal partnerships
in planning borrowed from those efforts to manage competitive markets, but
ultimately, distended and discredited the fair trade model by incorporating
large scale businesses and mandating economy-wide trade rules that sharply
reduced price competition. State-level fair trade laws persisted through the
1950s, but their popularity waned with consumers and jurists thereafter.
To some business historians, the supposed failure of the
fair trade movement may appear inevitable. One might reasonably believe that
the early twentieth century’s independent proprietors – such as specialty
producers of foodstuffs, coffees, and make-up as well as independent retail druggists
and grocers – never stood a chance against the superior efficiencies of mass
production and retailing with its improved economies of scale and scope. Those
technological imperatives, that narrative goes, acted as a driving force behind
historical change, at least according to a simple caricature of the Chandlerian paradigm.
If viewed from that lens, it is easier to dismiss the proponents of fair trade
contracts and the fair trade laws that enforced them as rent-seeking, backwards, and
merely nostalgic for a bygone era. (For more on Alfred Chandler and the Chandlerian paradigm, see Richard John's historiography here, which appeared in the Business History Review.)
Of course I would not allege that the Chandlerian
framework would require such a simple critique, nor would I assert that all
business historians subscribe to the Chandlerian paradigm even in its more
sophisticated form of historical analysis. Historians like Philip Scranton have
pioneered alternative narratives that emphasize the continued importance of
independent proprietors, entrepreneurs, and craftspeople. The point here is
that there is a technological determinism that we all must confront, regardless
of the history we’re writing.
Here’s where I think that new opportunities emerge for
historians of regulation to overlay the interpretative lens of legal
history onto business history’s deep studies of firm-level challenges and
changes. Legal historians offer a skill set adept in analyzing how the law
shapes markets through procedures, rules, and enforcement. They also
demonstrate how legal change happens over time by investigating key litigants,
lawmakers, and mezzo-level bureaucrats who propel institutional change forward.
Likewise, business historians offer key analytical insights on how private firms
govern markets through inter-firm contracts, trade association rules, and industry
norms. Those firms and associations often inform the law-making process – we can
refer to it as capture or coordination of the regulatory process; examples abound
of both. But, only by taking both fields’ analytical frameworks and emphasis on
particular actors (policymakers and regulators, on the one hand, and firms, on
the other) can historians of regulation produce truly robust explanations of
institutional and economic change. (Ed Balleisen has written extensively on the history of regulation, blending business and legal history. Several other historians have as well, such as Lou Galambos, Naomi Lamoreaux, Brian Balogh, Victoria Saker Woeste, to name just a few.)
American Fair Trade blends legal and business history to
construct an institutional analysis of U.S. competition policy between 1890 and
1940. It focuses not on the large scale firms and the trust-busting cases that
have garnered so much attention, but rather it emphasizes the role that
independent proprietors played in shaping private markets and influencing
public law. It demonstrates the
surprising flexibility of early twentieth century antitrust policy and the
unexpected partnerships between business groups and federal regulators. The
institutional story displaces the myth of free market competition and, I hope,
leaves us with a more thorough understanding of how law and society reflected
time- and place-specific rules governing fair competition, which – at least for
some time – ordered markets.
