Competition or monopoly? The implications of complexity science, chaos theory, and evolutionary biology for antitrust and competition policy.

I. INTRODUCTION

Predicting the competitive and economic impacts of business conduct and relationships (1) ranging from horizontal marketing joint ventures to vertical restraints demands an assessment and understanding of "immeasurable dynamic relationships." (2) Despite the assiduous efforts of economists and lawyers to bring order and predictability to the competitive effects evaluation process, antitrust regulation and decisionmaking are guided as much by assumptions and values, as they are by neutral economic or scientific principles.

Can antitrust and competition lawyers and economists look to modern science for guidance? As shown by the surrounding Antitrust Bulletin articles, several commentators have recommended looking to the emergent scientific field of complexity theory, as well as evolutionary biology. Their noble and creative efforts have been useful in emphasizing the importance of competition and diversity in creating and maintaining productive and stable economic systems and in identifying potential emergent forms of economic order. Continuing efforts to employ rigorous multidisciplinary thinking in addressing antitrust and competition issues should be encouraged.

We must be careful, however, not to misapply scientific and biological metaphors in seeking to support values-driven economic conclusions. In The Keystone Advantage, (3) Marco Iansiti and Roy Levien seek to bolster Milton Friedman's and the Chicago school's efficiencies and concentration values-driven defense of monopoly through a biological metaphor. They argue that dominant business firms and monopolies should be shielded from antitrust regulations because they are analogous to keystone species in biological ecosystems.

The Keystone Advantage's biological metaphor is facially compelling, but ultimately unsupported by sound biological principles or evidence. Indeed, biological studies show that ongoing aggressive horizontal competition at all levels, including the keystone level, is critical to building and maintaining healthy, stable, and productive ecosystems.

Unlike biological ecosystems, our economic system is based upon voluntary contractual relationships. Fairness and ethical behavior are crucial to maintaining the long-term health and stability of our economic system. Antitrust regulation of monopolies protects the integrity of our economic system by promoting fair and ethical competition and contractual dealings.

We should continue to look to the teachings of complexity science, chaos theory, and evolutionary biology to better understand our complex competitive economic system and to identify potential emergent forms of order. In so doing, we will gain a greater appreciation for the importance of diversity and ongoing competition at all levels of our economic system. We also must keep foremost in mind that effective antitrust regulation requires a continuing effort to delicately balance conflicting implied values such as freedom and fairness, competition and collaboration, and diversity and efficiency.