A liberal loved by economic conservatives

June 14, 1994|By Robert Kuttner

JUDGE Stephen Breyer, who will likely be confirmed to the Supreme Court next month by a nearly unanimous Senate, is a liberal much loved by economic conservatives. As a lead Senate staffer for Ted Kennedy in the 1970s, Judge Breyer championed economic deregulation. He was the only Carter appointee to the federal bench who Republican senators were willing to confirm after the 1980 election. As a federal appeals judge since 1980, Judge Breyer has been a leading foe of antitrust enforcement.

His books, articles, and opinions suggest a man of subtle intellect and sensible moderation on many other issues. But on economics his views are strictly of the laissez-faire "Chicago" school, in the mold of such leading Reagan judicial conservatives as appellate judges Richard Posner and Frank Easterbrook and former judge Robert Bork.

A recent article in the Fordham Law Review by law professor William E. Kovacic tallied the votes of Reagan-era judges in antitrust cases. The most conservative of all was Stephen Breyer, with a perfect record of ruling against plaintiffs on all 17 relevant antitrust cases.

Judge Breyer seems to believe antitrust should be limited to hard core cases of price fixing and gross monopolies. The other sorts of anti-competitive practices banned by Congress -- selective price cuts intended to harm a competitor ("predatory pricing"); requiring a customer to buy one product as a condition of buying another ("tying arrangements"); giving more favorable terms to some customers at the expense of others ("discriminatory pricing"); and wholesalers strong-arming retailers not to give discounts ("retail price maintenance") -- strike Judge Breyer as normal competitive tactics. Were Judge Breyer Mr. Clinton's head of the Antitrust Division, it is unlikely the Justice Department would be investigating Microsoft for predatory pricing or tying.

Judge Breyer's own scholarly writings often fall back on a familiar Chicago school device of relying on tricks of logic rather than evidence. Predatory pricing, in Chicago logic, is improbable because the company that reduced its prices below its costs would be cutting its own throat.

Of course, predatory pricing is just what happened in the early years of airline deregulation. When upstarts like People Express began underpricing the major airlines, the majors offered selective discounts on just enough seats to lure back customers and put the new carriers out of business.

The fact that more recent upstarts, such as Kiwi Air, have survived, owes much to the tougher Clinton administration antitrust policy which warns major carriers not to use discriminatory pricing. Ironically, airline deregulation offers more competition today because of an antitrust philosophy Judge Breyer evidently opposes.

The example is telling, since Judge Breyer was a principal architect of airline deregulation. In 1974, he organized a series of hearings on "regulatory reform," gradually persuading himself and his boss, Ted Kennedy, that more than reform was needed. Making a close alliance first with foes of regulation in the Ford administration and then with economist Alfred Kahn, head of Carter's Civil Aviation Board (CAB), the judge achieved a consensus in favor of full deregulation of fares and routes -- and abolition of the CAB.

Judge Breyer's two books, the elegant "Regulation and its Reform" (1982), and his shorter "Breaking the Vicious Circle," based on his 1992 Oliver Wendell Holmes lectures, ridicule economic regulation for being costly, random in its targets and ,, bureaucratically cumbersome.

Judge Breyer gives great weight to the costs of regulation, citing mostly conservative scholars, but says little about the ills regulation was intended to prevent. "At all times regulation imposes costs that mean less real income available to individuals for alternative expenditure," he states flatly.

That claim, of course, leaves out the possibility that the benefit exceeds the cost. It also ignores that regulation sometimes forces technical progress. If industry is not permitted to pollute, it often invents a technically superior alternative that yields a net benefit to society. Conversely, he fails to address deregulatory disasters such as the savings and loan scandal.

His most recent book begins by offering several cases of regulatory foolishness, but concedes, surprisingly, that some regulation is necessary. To streamline it, he proposes a kind of Platonic committee of regulatory wise men and women, which would be "above politics."

Judge Breyer is emblematic of the ascendancy of conservative economic ideas. His appointment also underscores that Ted Kennedy is less of a doctrinaire liberal than is often suggested; that his staffers are eclectic as well as brilliant, and that he is very loyal to them.

With Judge Breyer, President Clinton gets an intellectual leader of the dominant centrist bloc on the court. If the nominee is conservative on economics, he is rather liberal on the environment, civil rights and civil liberties. He is also a passionate advocate of sentencing guidelines and rather tough on criminal suspects.

Mr. Clinton's legacy will be a more thoughtful and less controversial court, one neither on the cutting edge of reform, like the Warren court, nor in the vanguard of reaction. This centrism is seemingly in keeping with the Clinton presidency.

However, the centrism that got Mr. Clinton elected blended moderate social views with populist economics. Judge Breyer's blend, if anything, is the opposite.

Robert Kuttner writes a column on economic matters.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.