Sherman Antitrust Act A Critical And Necessary Statute

SHERMAN ANTITRUST ACT I claim that the Sherman Antitrust Act is a critical and necessary statute that gradually caused significant changes in business practices in order to ensure a competitive free market system essential for long term growth of the economy, although it faced criticisms for sacrificing economic efficiency. This fundamental statute continues to notably shape the economic landscape even today, albeit being more than 100 years old. The act contains three sections. The first section renders every contract, trust and conspiracy in restraint of interstate and foreign trade illegal (Dana 1903). The second section effectively penalizes everyone engaged in monopolizing any part of the trade or commerce among the several States, or with a foreign nation. The third section extends the first section to include U.S. territories and the District of Columbia. Prior to the enactment of this act several states within the United States had passed similar laws for intrastate businesses. However, the Sherman Antitrust Act of 1890 was the first measure passed by the U.S. Congress to prohibit trusts and regulate interstate commerce (Initiative). The opponents of the act claim that it made the economy less efficient. Bradley (1990) asserts that the Sherman Act discouraged scale economies that promoted lower costs and prices, penalized successful market entrepreneurship, and rewarded the political entrepreneurship of less-efficient business rivals. Others such as Comanor (1995)Show MoreRelatedThe Debate Over The Adequacy Of Restrictions On Commercial Speech And Free Market Competition1605 Words   |  7 Pagesto be beneficial to both society and business. The Supreme Court Case of Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council was an important case in determining the application of the First Amendment to commercial speech. 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