Martin Luther’s Theology of Antitrust

FROM THE BOOK

In the United States, the currently dominant value paradigm for antitrust law centers on the concept of “consumer welfare” – a theme most famously stressed by antitrust scholar Robert Bork, who would later be unsuccessfully nominated to the U.S. Supreme Court. Bork held a low opinion of the theoretical trajectory of American antitrust law since its inception, and complained that the lack of consistent standards for adjudication had turned antitrust law into little more than the inefficient “harassment of business.” In his seminal study The Antitrust Paradox, Bork considered and rejected a wide range of potential theoretical justifications for antitrust law before staking out a novel position: consumer welfare — or the effect of market concentration on individual buyers – should be virtually the only factor courts should consider in determining whether certain forms of conduct were anticompetitive. In the simplest terms, for Bork high levels of market concentration — that is, the dominance of one or a few firms in a given market — should not be presumed legally problematic unless their dominance manifested in the form of increased prices for consumers. Judges’ own anti-monopoly instincts should play no part in their evaluation of antitrust litigation: in judging antitrust suits, courts should generally rely on highly complex mathematical analyses of defined product markets and defer to experts about the impact of concentration on consumer prices.

Bork’s approach soon changed the whole direction of American antitrust law and can readily be correlated with patterns of increased market consolidation across diverse sectors of the American economy. It has not been without its critics, however. In recent years, the ubiquity of the consumer welfare standard has been sharply criticized by a school of reformists known as “New Brandeisians” – named after Supreme Court Justice Louis Brandeis, known for his aggressive trust-busting instincts. 

Were he alive today, Luther would probably be unimpressed by the prevailing American approach to antitrust. While a standard of “consumer welfare” could be superficially interpreted as a crude proxy for the neighbor-love Luther deems so crucial, most of his other driving moral concerns drop out of modern antitrust theory. For one thing, Luther’s notion of neighbor-love in the market context extends not only to buyers, but also, as previously noted, to rival sellers – suggesting that a kind of “competitor welfare” analysis is required. Furthermore, by implicitly permitting high levels of concentration in particular markets insofar as prices remain stable, modern antitrust theory does nothing to alleviate the dangers of both egocentrism – belief in lordship that is not properly one’s own – and arrogance in the face of existential risk.

Methodologically speaking, these latter concerns on Luther’s part are “vertical,” or oriented toward the God-man relation, and so altogether absent from “horizontal” understandings of economics that remain confined to the level of the immanent. And it is this broadly premodern orientation that has likely deterred contemporary scholars from seeing Luther’s theology of antitrust as in any way relevant to present debates. In one of the only existing works to directly place Luther into conversation with modern antitrust theory, scholars Kenneth Elzinga and Daniel Crane dismiss Luther’s analysis of the Joseph story – in particular, the distinction Luther draws between purchases for the public good and those for private gain – as unpersuasive, “[b]ecause antitrust economics does not distinguish whether monopoly profits are used for personal gain or personal philanthropy” and “resource misallocation” results in both cases. But Luther’s response to that charge would likely be blunt: Christian economics should make such distinctions. Luther’s approach is entirely uninterested in baptizing the natural order of things, and far more concerned with ordering those things according to Christian ethics.

Luther would have good reason to stake out such a bold position. After all, if his theological claims are sound, then the principles informing his analysis are not merely contingently true, but perennially true. This means that the pragmatic policy conclusions that follow from those principles – assuming that in fact they do so follow – cannot logically be refuted by the modern adoption of a “consumer welfare” analysis. The consumer welfare approach is a product of its time and embeds normative judgments of its own, such as the implicit notion that “ease of consumption” is the only relevant antimonopoly consideration. Luther rejects that particular normative judgment and argues for his own: that even in the civil sphere, authorities should regulate market conduct in a manner consistent with Christian theological commitments.In short, the fact that modern antitrust theory has “moved beyond” appeals to the transcendent in no way rules Luther’s own moral approach out of bounds. It simply means that a different metaphysical orientation now informs the law. One could certainly argue that Luther’s pragmatic conclusions do not follow from his theological premises, but that is an altogether different question and one not generally on the table in contemporary debates.

– Chapter 5: Luther’s Antitrust in the Modern World