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Antitrust, the Market, and the State: The Contributions of Walter Adams.

Walter Adams was professor of economics at Michigan State University from 1947 (doctorate, Yale University, 1947) to 1992, served as its president, and was awarded the rank of Distinguished University Professor. His is a celebrated academic career, filled with honorary degrees, prestigious government appointments, international teaching assignments, and presidencies of several economic organizations. What a delight to be asked to review this collection representing a tiny slice of the work of a truly gifted, creative, and dedicated teacher-scholar (and stylist, e.g., p. 128, "The virus of bureaucracy is equally deadly to public and private monopoly"). It is rare, indeed, to find one who is professionally competent, personally affable, and (as Cecil MacKey says in the "Preface"), "absolutely incorruptible." In the allotted space, I cannot do justice to Professor Adams' work. I will instead list briefly some areas where he was (and is) a pioneer and/or major promulgator.

The 16 chapters in this volume are under four rubrics: Fundamentals; Selected Industry Studies; Selected Policy Studies; and Public Philosophy. Even if one confines study of Adams' work to this slim book, one can discover areas where his ideas are durable. However, since a complete list of his 12 books and approximately 140 articles and pamphlets from 1948 to 1991 is provided, the reader should read more of his accessible, fun, lively, erudite, fast-paced, frank, revealing, and tough work.

While F. M. Scherer's "Introduction" mentions a few of these, some of Professor Adams' major contributions include his:

(1) pre-public choice school concern that private interests dominate the public ones--that is, the rational, self-interest, and concupiscent (a favorite word of his) calculus that motivates human action in private markets applies to decisionmaking in the public sector;

(2) contention that justifications of large firm size on grounds of superior efficiency, innovation, marketing, etc., while possible are generally unlikely and at any rate unvalidated, especially in the automobile, petroleum, national defense, and steel industries;

(3) concern that government protection of domestic industry has been vastly overdone as competitive markets should follow meritocracy;

(4) belief that competition would work quite well in some, but not all, traditionally regulated industries such as trucking, which he called for deregulating at least as early as 1958 for not possessing subadditive costs;

(5) adumbration of the concept of rent seeking, citing Alfred Marshall;

(6) suggestion of some precocious specific public policy measures, e.g., proposal of a new antitrust law, including an efficiency defense for bigness, in 1949 that was not unlike the federal government's merger guidelines drafted years later;

(7) insistence that while structure alone does not dictate conduct and performance, the structure of industry and of government matters very much (similar to the "new institutionalism");

(8) recognition, before the "new learning" advocates emerged, that while multidimensional performance is the bottom line, how can it be measured with tolerable accuracy;

(9) emphasis that competition is a process as well as a state, thereby requiring maintenance of diversity through independence to keep the competitive process working and the competitive state fluid;

(10) criticism of the concept of countervailing power and his support of administered price theory (as students we enjoyed his and Dr. Lanzillotti's good-natured jibe with a fictitious unpublished administered pricing study that "proved" their position better than an unpublished study cited by Professor Stigler):

(11) interdisciplinary approach coalescing economics, law, and public policy to recognize, control, and eliminate economic and political power;

(12) struggle to make courts grant meaningful dissolution, divorcement and divestiture relief; and

(13) advancement of cigar smoking to an art form as exemplified by the photographs on the dust jacket and inside the book.

Stay tuned. Professor Adams will no doubt add even more to his impressive list of scholarly work (Yogi Berra says, "I don't know where it is going to stop except at the end"). For instance, he has produced three interesting economics books since 1988 alone. He continues to publish research that is understandable to the nonspecialist, relevant to a mature understanding of industrial economics, and reflective of the current thinking on pertinent subjects. His idiosyncratic toughness, honesty, and insights are sorely needed when industrial economics is at a turning point between the extremes of monolithic game theory and case-by-case institutionalism. To paraphrase slightly Woody Allen: "More than at any other time in history, industrial economics faces a crossroads. One path leads to despair and utter hopelessness; the other to total extinction. Let us pray we have the wisdom to choose correctly."
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Author:Kamerschen, David R.
Publication:Southern Economic Journal
Article Type:Book Review
Date:Oct 1, 1993
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