Much of our discussion to this point has been fairly abstract—especially for a book about antitrust and competition law, which would usually be consumed with the fine minutiae of legislative politics, corporate history, and judicial opinions. So it might be helpful at this point to look at how the philosophical conception of rights that we outlined in Chapter 4 apply to the most significant violations of antitrust or competition law, allowing us to see how a rights-focused approach differs from the standard economic one (and the Neo-Brandeisian one when appropriate).

Collusion and price-fixing

Let's start with what is probably the most obvious antitrust violation: collusive price-fixing. Firms cannot, by law, conspire to maintain prices above where they would if the firms set them independently and competitively. Even in industries that are less competitive to begin with, in which firms earn significant profits, they can increase their total profits by collectively agreeing to raise their prices. In effect, they would be acting as if they were a monopoly, splitting its higher profit among different divisions or departments. If successful, the higher prices lower output and consumer surplus, and despite the higher profits, total welfare falls, as we saw in Chapter 2. There is nothing special or unique about price-fixing: any instance of collusion between firms competing in the same industry is considered anticompetitive and therefore potentially illegal. But price-fixing is most clearly and directly related to consumer surplus and overall welfare, given the role that prices play in the market analysis.

If we look at price-fixing from the perspective of rights, however, the matter becomes much less clear and hardly obvious. The rights of disposal included in most common-sense conceptions of property rights would include the right to set the terms at which a seller offers a good or service. Firms are free to lower or raise their price as they choose, and consumers are free to respond by buying more or less as they choose. Consumers have the right to use their resources to make the purchases they want, and can accept or reject the offers made by sellers, but they have no right to a particular price (absent a previous guarantee or contract from the seller, such as a raincheck).

As we discussed in Chapter 6, antitrust enforcement is a case of the government using legal and regulatory means to address a nonwrongful externality. To this end, authorities try to reduce harm that results from anticompetitive behavior even though it violates no rights. However, this type of externality is not addressed by subtly adjusting incentives with Pigouvian taxes or acknowledging property rights to enable the application of the Coase theorem. Instead, the force of law in the form of injunctions or criminal penalties is brought down on firms who conduct their business in ways that fail to maximize welfare.

Looked at another way, the enforcement of antitrust law implies that firms have a responsibility to contribute to, if not maximize, consumer surplus or total welfare. From the perspective of antitrust advocates and enforcers, firms exist not to further the interests of their owners but to benefit society. If they fail to do this to a significant extent, they are breaking the law and can be sanctioned. This may be the most controversial but least appreciated aspect of the nature of antitrust and competition law in general. In this chapter we’ll explore several dimensions of this unique obligation, including why it's such a problem, how it can possibly be justified, and what its enforcement implies about the status of prosecuted firms under the law.

To what lengths?

To be sure, increasing welfare or well-being is a good thing, and not just according to utilitarians. All else the same, nearly everyone believes that making society better off is ethically good, even if it is not necessarily everyone's primary moral focus. But that qualification, “all else the same,” is doing a lot of work—the devil, as they say, is in the details.

The literature on utilitarianism is full of “nightmare examples” of people doing horrible things in the interest of maximizing welfare. A common one has a dictator facing a violent popular revolt, so he picks one person out of the crowd and executes them to calm the crowd, saving not only his own neck but also the many lives that would likely have been lost in the uprising. Other examples similarly lean into supervillain territory, such as Ozymandias from the graphic novel Watchmen, who fakes an alien invasion to unite the hostile nations of the world against a common enemy.

In liberal democracies, we are accustomed to a wide range and degree of freedom, limited only by the equally valid freedom of others. In other words, individuals are presumed to have the right to pursue their interests, whatever they may be, provided they do not wrongfully interfere with others doing the same.

The word “wrongfully” is crucial here. The five people ahead of me in the line for coffee in the morning are definitely interfering with my interests, but they are not acting wrongfully if they simply arrived there before I did. However, if someone arrives after me and cuts in front of me, that person is acting wrongfully, violating an important social norm, even if not a legal one. If I manage to procure my treasured beverage and then, upon leaving the coffee shop, someone attacks me and steals my coffee, that person has violated a clear legal norm, and I can marshal the powers of the state to my side to pursue justice. (My sole recourse to the person who cut in line is to express scorn and hope my fellow patrons do the same.)

Although we may resent those who have a negative impact on our lives, we should also recognize when they had every right to their actions. Each of us interacts with countless other people in myriad ways every day, inevitably leading to blameless conflict, due only to scarcity of time and space (and coffee shops). It is only when people violate social or legal norms, implying rights held by others, do those actions become wrongful—and it is only when actions are wrongful that we feel justified in addressing them in some way, whether by scorn (in the case of social norms) or state action (in the case of legal norms).

This idea applies not only to individual actions, but to those of businesses as well. Firms take many actions that affect individuals (and other firms) in positive and negative ways, but even the latter is not of concern to the state unless they violate recognized rights. Businesses can increase prices, stop producing certain products, or close locations, all of them possibly setting back the interests of individuals who enjoyed or relied on them.

In arguing against the entire field of antitrust and competition law, I have set myself quite the task. After all, antitrust is a largely unquestioned part of law and regulation in most developed countries around the world. In the United States, antitrust law has been raised to a level of importance normally reserved for the seminal documents of liberal democracy itself. For example, in 1972 the Supreme Court pronounced that

Earlier, the Court called the Sherman Act “a comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade.” Indeed, according to political scientist Marc Allen Eisner, “antitrust was often referred to as a constitution for the American economy,” reflecting the centrality it has come to occupy in the firmament of economic regulation.

Although liberals and conservatives maintain their own unique focus and emphasis for antitrust, most scholars and policymakers across the political spectrum support some degree of antitrust enforcement. As economists Kenneth Elzinga and William Breit wrote, antitrust is “one of those rare issues that cuts across even the most formidable of ideological barriers.” Democratic U.S. Senator Howard Metzenbaum, writing in the Antitrust Law Journal in 1987, asserted that “if you are for free enterprise, then you must be for antitrust. You can't be for one and against the other.” By the same token, economist George Stigler of the University of Chicago—a school famous for a restrained approach to competition law—claimed that antitrust is “public interest law in the same sense in which … having private property, enforcement of contracts, and suppression of crime are public-interest phenomena.”

Regardless of the approach taken to antitrust—whether traditional, structuralist, Chicago, Harvard, post-Chicago, or Neo-Brandeisian— most all scholars and policymakers today agree that antitrust is an essential aspect of the legal system regulating the economy.

In the previous chapter (and throughout this book), I argued that, by penalizing anticompetitive behavior, antitrust law holds business owners legally responsible for promoting consumer surplus or total welfare. This runs counter to the appropriate conception of free trade in a liberal society, in which commercial transactions should be treated no differently from any other type of human activity—which is to say they should be permitted as long as they do not infringe the rights of others to do the same. The behavior considered to be anticompetitive under antitrust law falls squarely within the business owners’ property rights understood in a moderate, mainstream way, and does not violate any rights of other parties (including consumers and competitors). Nonetheless, such behavior is prohibited, indeed criminalized, because it does not sufficiently contribute to consumer surplus or total welfare.

In this final chapter, we pull back from the fine details to get a general and abstract view of the market, competition, and the government, as it is ideally considered in a liberal democracy that takes the rights of all seriously. As we shall soon see, this view is antithetical to the utilitarian worldview reflected in the economics-oriented and Neo-Brandeisian approaches to antitrust, and in that sense this chapter brings us back to where we began on the first page of this book.

The nature of the market and the role of government

The critique of antitrust law I’ve presented reflects a particular understanding of the purpose of the market and the role of the government in it, which is very different from how economists and antitrust advocates understand them. So we need to ask the question: what is the purpose of the market? (By “the market,” I mean the institutions of commerce, including firms, consumers, and the context in which they trade, whether a physical marketplace or online websites.)

There are two general answers to this question, which reflect different perspectives on how the economy, government, and society interact. The first answer is that the market serves society through generating wealth and well-being: supplying goods and services, employing labor, and creating returns on investment. In other words, the market is an instrument to benefit the members of society, and as such it can and should be regulated to ensure that it creates the most benefit possible.

The central problem that I identify in antitrust is that it punishes actions that, although they may create harm, do not involve any wrongdoing. For instance, Raju Parakkal and Sherry Bartz-Marvez write that antitrust law “is primarily intended to restrain large firms from engaging in anticompetitive behavior that is not only detrimental to other firms but for the most part deleterious to the interests of consumers across the economy.” Like similar statements quoted earlier, this addresses the negative consequences of anticompetitive behavior, but makes no reference to any moral wrongdoing. The underlying idea is that all harm is equally problematic and needs to be minimized (or optimized with respect to benefit), regardless of any consideration of whether the actions that brought them about are wrongful in the sense of violating rights.

This is an intrinsic, pervasive, but largely unacknowledged problem with mainstream economics in general—and ultimately a legacy of its roots in the moral philosophy known as utilitarianism, with which we begin this chapter examining the ethical foundations of economics. After introducing the basic tenets of utilitarianism and explaining how they relate to economics, I’ll discuss the implications of their neglect of meaningful rights, turning to another school of ethics to fill that gap before we discuss rights in more detail in the next chapter.

Utilitarianism

The basic concept of utilitarianism can be traced back to antiquity, but its most well-known and modern presentation is due to the philosopher Jeremy Bentham, with important elaboration done by philosopher and economist John Stuart Mill. Both men were reformers who recommended utilitarianism as a tool for social betterment through government policy and law, as well as a way of individuals to live an ethical life. In its most basic form, utilitarianism focuses on maximizing the total happiness, well-being, or utility of the members of a group or society. As such, it is a specific form of consequentialism, the general term for any ethical system that places moral value on the results or outcomes of actions, rather than those that focus on the moral status of actions themselves (such as deontology) or the character of the persons performing them (such as virtue ethics).

The world today appears to be at the brink of a potential system collapse; the planet is literally “burning”, “drowning” and “melting”, and societies are in deep distress. A daily spectacle of fires, melting glaciers, flash floods, food riots, interminable fuel queues, homelessness, gruelling poverty and capsized boats overloaded with migrants plays out before our very eyes. Oxfam and others do a competent job of updating us each year in their annual reports on the pandemic of galloping poverty and inequality. The recent global figures are beyond alarming, with the richest 10 per cent owning 76 per cent of the total wealth while the poorest half has only 2 per cent. And what's more, the Covid-19 pandemic delivered a bumper harvest to the top 1 per cent of the global rich who gained almost two-thirds of the newly generated wealth since 2020. From our perspective as human rights advocates, the gaping chasm between the international legal order and the reality on the ground seems increasingly unbridgeable. The right to self-determination is inalienable, entitlements to all human rights are universal, without discrimination, and states have the duty to protect, as well as to meet all their commitments under international law. And yet, we have instances where international lawyers and the international community tip-toe around critical issues as the complexities and indeterminacies of international law are used to legitimize the status quo. The system is surely tipping over the precipice.

The trajectory of this malaise is based on several years of neglect by governments to respect their human rights obligations, especially of those most left behind. The social contract enshrined in the Universal Declaration of Human Rights (UDHR) 75 years ago, stands largely torn and tattered today. Covid-19 exposed the shocking consequences everywhere, of chronic underinvestment in social spending – in public health, social protection and other economic and social rights. As pointed out by the UN secretary general in the midst of the pandemic, “we are in an age of unprecedented inequality, and a new social contract with human rights at the core, is urgently required to reset the balance”.

The Covid-19 pandemic had an indisputable negative impact on human rights worldwide. The prolonged lockdowns marked a turning point for humanity. Unfortunately, shortly after exiting the Covid-19 nightmare, there is still a clear disregard of the pandemic's harmful effects. The return to normality, ushered in by vaccines, has led to a collective amnesia of the profound inequalities that the pandemic laid bare.

During the first months of the pandemic, hospital facilities, nursing homes, prisons and educational institutions were the focus of attention. Despite this, the tragedy exacerbated society's individualistic model, in which “everyone saves themselves”. In this model, the focus on rights tends to be a matter of niche interest or to be relevant solely for countries with advanced development, which can devote effort to this task. At the same time, and without empirical basis, our economic model insists that social rights have a high cost that must be carefully weighed; as if safeguarding civil and political rights were not as costly.

In this context, in an effort not to forget the pandemic's impact on the world and to highlight its effects on historically discriminated groups, the book that I present here acquires a fundamental relevance. Covid-19 will mark this generation, and changes are expected both in terms of our own understanding of social relations and wider societal dimensions – one of which is the economic.

From Chile's perspective, this takes on special significance given the current constitutional discussion. In October 2019 social protests spread throughout the country in response to an accumulated antipathy towards the economic model installed by force during the dictatorship of General Augusto Pinochet. This model, promoted by the “Chicago Boys” and with Chile as a testing ground, has been in crisis as a result of a series of events that led to citizen protest.

Today Chile awaits a new constitution, after the first proposal was rejected by the vast majority of the population in a referendum in September 2022. Paradoxically, this first proposal placed, at its heart, the guarantee of social rights through a social rule of law instead of a subsidiary state.

INTRODUCTION

The Argentinian feminist movement has a long and rich tradition, which is crystallized in – among other things – 35 editions of Encuentros Plurinacionales de Mujeres, Lesbianas, Trans, Travestis, Bisexuales, Intersexuales, y No Binaries (Plurinational Meetings of Women, Lesbians, Trans, Travestis, Bisexuals, Intersex, and Non-Binary People), which started in 1986 and were interrupted only during the Covid-19 pandemic. The Encuentros are a unique phenomenon in the world: yearly open meetings in which tens of thousands of women and people with diverse sexual orientations and gender identities (SOGI) from all geographic regions, social stratifications and political orientations get together to think and discuss the movement's agenda collectively.

In 2015 the first demonstration under the slogan “Ni Una Menos” (“No One [Woman] Less”) further enhanced the vitality and massification of the feminist movement in the country. This protest constituted a historic event, which gave political, social and cultural volume to the condemnation of gender violence (Centro de Estudios Legales e Sociales [CELS] 2019). It contributed to the prioritization of gender issues within the public agenda, which included demands related to the rights to legal, safe and free abortions and the unfair sexual division of labour.

In this context, it is unsurprising that feminists have progressively gained space, albeit not without effort, in the political arena. Cross-party alliances between legislators, for example, played a key role in bringing the demands of feminists from the streets to the National Congress and, ultimately, in achieving, after several attempts, the enactment of the Voluntary Interruption of Pregnancy Law (Congreso Nacional de la Nación Argentina 2020).

Likewise, gender units have been gradually institutionalized within the government (Lopreite & Rodríguez Gustá 2021), and have slowly gained hierarchy and autonomy, although these changes have not always resulted in an increase in budget allocation. The path towards the institutionalization of gender machinery within the national government has not been linear; nevertheless, the change of government administration in 2019 was a turning point. Since the election to the presidency of Alberto Fernández late that year there has been a shift at the national level in terms of the political discourse and priorities, moving away from the previous government's very orthodox neoliberal positions and proposing a recovery of the role of the state as a guarantor of the well-being of society.

INTRODUCTION

Courts are often viewed as operating in the field of the legal, as opposed to the political or the economic. Yet we know, of course, that such distinctions are ultimately difficult to maintain. Markets and economic power are products of, and shaped by, law. The question of the role of courts in political economy is an unavoidable one, since the issue at hand is not whether to exert public power through the law to impact the economy but, rather, how to do so (Klare 1989: 17– 18). This chapter explores that question in the context of the possibility of challenging the dominant neoliberal model through socio-economic rights adjudication, looking to build on experience following the 2008 financial crisis. In the aftermath of the crisis, international financial institutions and other market actors often demanded that states implement austerity measures, and courts rarely struck such measures down as human rights violations.

In many cases socio-economic rights were interpreted as conforming to neoliberal rationality, as courts accepted trade-offs to serve financial market considerations. This interpretation was linked to the traditional view that courts should defer to other branches of the state on social and economic issues. This chapter argues that this view should be revised in our political-economic context.

As public finances have become marketized, deference to legislatures amounts to deference to markets. In the light of severe representation failures when legislatures become tools of market justice, we might, subject to various caveats, view a more active judicial role as a potential counterweight in favour of social justice. Drawing on post-2008 case law, the chapter sketches the mechanisms by which judicial enforcement of socio-economic rights could challenge neoliberalism, namely by immunizing certain social goods from market logic2 or disrupting policy-making processes that are overly responsive to markets.

The chapter begins by clarifying the understanding of neoliberalism. Although the term has many applications, the focus here is on two key tenets. First, there is the encasement of the economy, meaning the distancing of economic policy-making from democratic control; and, second, there is economization, meaning the expansion of market logic to ever more aspects of social life.

RIGHTS-BASED ECONOMIES: DISRUPTING NEOLIBERALISM

After the onset of the Covid-19 pandemic and the economic devastation it has wrought, it became evident to a far larger group of people that many prevailing economic systems and policies were largely disconnected from any productive social function and were, in fact, working in opposition to the needs of communities contending with extreme social and economic inequality, climate catastrophe, corporate abuses and a lack of justice. Fundamentally, Covid-19 laid bare the vulnerability of our institutions and exposed the underlying weakness of neoliberal economic policies, calling for a reckoning (Ahmed et al. 2022).

Neoliberalism has failed people and the planet. Neoliberalism is, as we understand it, a political project that represents the continuity of an exclusive way of policy-making and implementation, run by an elite (Harvey 2005). Neoliberalism is based on the myth that the economic market has the power and ability to regulate itself and correct related distortions without much, if any, state intervention. It pursues endless growth and profit and relies on tools such as programmatic targeting, austerity and retrenchment (Boesten 2007). Neoliberal economic models and neoclassical economics clash with a rights-based, feminist and sustainability vision (Winch, Forkert & Davison 2019). Under neoliberalism there is no space for human rights, whether civil and political – or, indeed, social, economic and cultural rights – as they are all secondary to the proposed virtues of a self-regulating market, which exists only by virtue of the fact that states use their legislative and regulatory powers on behalf of large corporations. This was evident in the context of the Covid-19 vaccine distribution2 between countries in the Global North and the Global South.

Governments in the Global North also protect the interests of the multinational companies that are headquartered there and are often owned and financed via tax havens (Leite & Kohonen 2019). This dynamic reinforces a neocolonial cycle of North– South exploitation and is reflected in the pattern of extractivism and exploitation that fuels the climate crisis (Cirefice & Sullivan 2019). Youth in these and other communities struggle to find meaningful livelihoods because of the lack of public investment, incomes or employment prospects (Sukarieh & Tannock 2008).

INTRODUCTION

A new body of scholarship is emerging, under the banner of a “Rights-Based Economy” (RBE). An important part of its agenda is to seek to ensure that macroeconomic and fiscal policies support the realization of human rights. For some, it is the opposite of austerity: it consists of increasing the purchasing power of the poor and ensuring that labour receives a larger proportion of the value created in the economy, with the benefits of growth being spread more equally. For others, we need to go beyond Keynesian recipes and invent a post-growth economy. In this chapter, I try to show how human rights offers a way beyond that opposition, which often makes it difficult to forge alliances across different components of the progressive camp.

In a paper exploring the positions of the United Nations’ Committee on Economic, Social and Cultural Rights (CESCR), Petel and Vander Putten (2021) note that the committee remains wedded to economic growth as a means to ensure the progressive realization of these rights. This should not come as a surprise. The idea that the realization of economic and social rights and poverty reduction require economic growth seems intuitive. It fits neatly within mainstream macroeconomic debates between the fiscally conservative, often found to the right of the political spectrum, and those, coming more often from the left, who argue for demand-driven solutions. For the former group, fiscal consolidation is a precondition for sustainable economic growth over the long term. For the latter, austerity kills growth. It is only by raising the incomes of lower-income earners and the middle class that output will be stimulated to increase and investors to invest. Both agree that growth is needed but disagree on the best way to achieve it.

The reign of this orthodoxy can be readily explained. To redistribute wealth and thus alleviate poverty, there must first be wealth created to redistribute. Moreover, growth is generally seen to hold the promise of employment creation, since poverty cannot be tackled by social protection alone but requires the active population to be provided with jobs – allowing, in turn, for their income from work to be taxed and their social contributions to finance insurance schemes.