Paper delivered to the Glasgow Competition Talks Seminar Series, School of Law, University of Glasgow
On October 14th 2021 I delivered a paper to the Glasgow Competition Talks Seminar Series at the University of Glasgow, for those with a research specialism in competition law. The paper was entitled ''The Market: The Economics and Politics of a Key Domain of Legal Thinking'.
Abstract: Competition law requires an engagement with lots of other disciplines, perhaps most notably with economics. Non-economists already talk about the economy all of the time, but the very familiarity of core economic ideas as they have taken hold in everyday life might be more of a hindrance than a help in understanding how competition law and economics interact. The obviously economic concept of ‘the market’ is, interestingly, one that is left largely implicit and undefined in modern economic theory. In many ways competition law acts to protect the integrity of the market, and it is a short step from that premise to making the directly political statement that it exists to allow the market to do what the market does best. In most models used by economists, this will mean ensuring that there are no distortions in the allocation of available economic resources, so that the economy in that purely hypothetical model world can work as efficiently as possible. This can very easily be translated into the political assumption that in the real world too markets should be left to their own devices to decide for us how the economy should be organised. However frequently we hear such claims, though, we should be sceptical of them, for they suggest that ‘the market’ is capable of identifying its interest in allocative efficiency and of having the will to enforce that interest. Yet ‘the market’ is clearly not a sentient being able to act in the same manner as a conscious human agent. How might we therefore make sense of the translation from economics to politics of the concept of allocative efficiency in a purely hypothetical model world to the assertion that ‘the market’ always knows best in the real world? My book, The Market, tackles this question by showing the very different ways in which the concept of ‘the market’ has entered economic theory, emphasising how recently it has been that the allocative efficiency definition of market dynamics has risen to prominence. Different economic definitions of ‘the market’ have different implications for competition law, and I demonstrate the varied ways in which that relationship might impact upon the thinking of competition lawyers.