Creative Discussion Podcast: Tim Muris & Bruce Kobayashi on ‘Zombie Antitrust,’ Price Discrimination, and Robinson-Patman

Joseph V. Coniglio hosts two guests, Tim Muris, Foundation Professor of Law at Antonin Scalia Law School, and Bruce Kobayashi, Paige V. and Henry N. Butler Chair in Law and Economics at Antonin Scalia Law School, to discuss the Robinson-Patman Act and its renewed enforcement.

Publications Mentioned

• Bruce Kobayashi and Timothy J. Muris. "Stop Making Sense: Reviving the Robinson-Patman Act and the Economics of Intermediate Price Discrimination," Competitive Enterprise Institute.
• Timothy J. Muris. "Zombie Antitrust: Is Robinson-Patman a Dead Law Walking?" Competitive Enterprise Institute.
• Melissa Holyoak and Christopher G. Mufarrige. "From Protecting Competitors to Protecting Competition: The Past, Present, and Future of the Robinson-Patman Act," Antitrust Law Journal 87, no. 2 (2025).
• Bork, Robert H. The Antitrust Paradox: A Policy at War with Itself. New York: Basic Books, 1978.
• Sreya Kolay, Janusz Ordover, and Greg Shaffer. "All-Units Discounts in Retail Contracts," Journal of Economics & Management Strategy 13, no. 3 (2004): 429-59.
• Frederick M. Rowe, Price Discrimination Under the Robinson-Patman Act. Boston: Little, Brown and Company, 1962.
• Joseph J. Spengler, "Vertical Integration and Antitrust Policy," Journal of Political Economy 58, no. 4 (1950): 347-52.

Cases Mentioned

• Federal Trade Commission v. Morton Salt Co.
• Federal Trade Commission v. Southern Glazer's Wine and Spirits, LLC.

Auto-Transcript

Joseph V. Coniglio: Thank you for joining us. My name is Joseph Coniglio and I am senior counsel and director of antitrust and innovation policy and the Schumpeter Project on Competition Policy here at the Information Technology and Innovation Foundation, ITIF.

And I'm proud to announce the release of our fifth episode of our new antitrust speaker series, Creative Discussion. We're channeling Schumpeter's idea of creative destruction. We'll be having wide-ranging and in-depth discussions with antitrust's greatest luminaries to discuss cutting edge issues in antitrust, tech, economics, and beyond, as well as get to know a little bit more about some of the leading voices within the antitrust community. With that, why don't we get started?

And I'm really very glad we've got a special program for this episode, where we'll be featuring not one, but two guests, I think, a pro-competitive bundling, which I think both of our guests would agree. We've got some really great new papers out that we're going to focus our conversation on. And when I announce our speakers, you'll see why we've narrowed the scope, as it would really take hours for us to give justice to their amazing careers in antitrust law.

So first we've got Tim Muris, foundation professor of law at the Antonin Scalia Law School and George Mason University, and senior counsel at Sidley Austin. Tim was chair of the FTC from 2000 to 2004, and has the distinction of being the only person to have directed both of the FTC's enforcement arms: Bureau of Competition, Bureau of Consumer Protection. His distinguished career includes a number of other positions in government, lots of work in private practice, as well as over a hundred and thirty books, monographs, articles, and other publications. Tim, I can say in full disclosure, was also my former boss at a time and really a great mentor. So thanks for being here, Tim.

Joining Tim is Bruce Kobayashi, professor and Paige V. and Henry N. Butler Chair in Law and Economics at the Antonin Scalia Law School at George Mason, where he teaches and publishes widely in antitrust, IP, and a number of other topics. Bruce served for many years as an economist at both the FTC and DOJ, most recently in a prior administration as director of the FTC's Bureau of Economics. And Bruce has also published dozens of books, monographs, and articles over the course of his distinguished career. Welcome, Bruce.

Bruce Kobayashi: Thanks to you; thanks for having me.

Joseph V. Coniglio: Sure. So okay, Tim, why don't we start with you?

So you and Bruce, you've got these two great papers that came out a few months ago over at the Competitive Enterprise Institute, a really great think tank I'd recommend to our listeners. Please do check it out.

On the notorious Robinson-Patman Act, which as we'll get into, is the major statute restricting price discrimination when we think about business-to-business arrangements up the supply chain. Now why don't we start with one of the articles that you've authored titled: "Zombie Antitrust: Is Robinson-Patman a Dead Law Walking?" But first before we get into that, tell us more about what Robinson-Patman is and maybe how it got started before it reached its status now its zombie status. Please, go ahead.

Tim Muris: Sure. And I wanted to thank you, Joe, and thanks to ITIF for inviting us. A hundred years ago almost all Americans purchased their products and especially groceries, from small stores that used middlemen to coordinate between the retailers and those who made the products. In fact, my maternal grandfather ran such a store in a small town in northeastern Ohio for a good chunk of the first half of the 20th century. Then, around 100 years ago, mass marketers were arising, including chain stores, the most famous of which was the Great Atlantic & Pacific Tea Company, the A&P for short. It was the largest retailer in the United States for 40 years, and it no longer exists. These stores used a new business model that bypassed the middleman. They relied on vertical integration, bulk purchases, and superior use of data.

Now, unsurprisingly, the incumbents reacted to the retailing revolution, and the reaction got especially strong during the Great Depression. The Roosevelt administration first attempted to cure the Depression, believe it or not, by raising prices through something called the National Recovery Administration, whose famous symbol was the blue eagle.

The NRA used codes of what were called fair competition- some of which attempted to stifle the new chain stores to protect the old firms. The Supreme Court, however, said the NRA was unconstitutional in 1935. 15 days after that Supreme Court decision, Wright Patman, who was from Texas, struck. The bill written by the Wholesalers Trade Association was called the Wholesaler Grocers Protection Act, and it mimicked those NRA codes to restrain the A&Ps of the world from bypassing the wholesalers. Senator Robinson quickly joined, but their bill couldn't pass when the Roosevelt administration and others opposed. A bill did pass, but it was changed substantially with new defenses, complexity, and considerable ambiguity. That bill became the FTC's primary competition weapon through the 1960s. Despite the deviation from the original proposal, the FTC interpreted the act as if it protected the inefficient from the new competitors.

Joseph V. Coniglio: I don't want to be guilty of the genetic fallacy here, but it really does seem that Robinson-Patman was born in regulatory capture. A really great example of that. But again, doesn't necessarily have to turn out badly. But you have this great section in your paper where you highlight how it did, specifically on how the act and its enforcement did harm competition and consumers, and I want to focus on that.

And of course, we have this broader idea from Bork in the '70s about how antitrust policies can be at war with themselves. And I think, as you really highlight, that Robinson-Patman Act really was a case in point and a great example of that. So, why don't you give us a brief overview of the history of the enforcement of the Robinson-Patman Act and why it did indeed turn out so badly.

Tim Muris: Well, just a few examples, and remember the original idea was to protect this wholesaler model from the new competition, especially from these chain stores. One example is, consider that there was a meeting competition defense added, and for decades, the commission unnecessarily restricted the defense, made it hard to use, which was, that was anti-competitive in itself. But the ways it did so were even more troubling. For example, and most troubling, the FTC wanted direct competitors to check each other's prices. It was like they wanted Pepsi and Coke to call each other and say, "Hey, what prices are you charging?"

Today, we would consider such checking evidence of price fixing. They also discouraged selective price cuts, and selective price cuts have been shown as a way to increase competition, especially in concentrated industries. The report that you discussed, discusses lots of problematic FTC interpretations, and let me just list a few more. One was: They forced retailers who often, when they dropped off goods at their store, would pick up other goods so their trucks wouldn't return empty. It forced trucks to, in fact, travel empty. That was, of course, inefficient- having trucks on the road that were empty. That cost hundreds of millions of dollars.

They also discouraged the most efficient forms of warehousing goods. Goods had to be stored sometimes, you know, between the manufacturer and the stores. And the Robinson-Patman Act had a prohibition on paying brokerage except for services rendered, and the FTC would apply that, sometimes, even when brokerage was paid. Now, it's true that modern courts are more hostile than past ones, but there's still a lot of these old, bad FTC laws on the books and old cases, and those old cases have come back to bite. There are recent, for example, Ninth Circuit district and appellate court decisions that rely on these old cases in problematic ways.

Now, the most important evidence about the FTC, about the Robinson-Patman Act, however, was how the people involved reacted to it. By 1969, there was an American Bar Association report on the FTC. The antitrust world was decisively against the FTC, and two facts were most crucial.

First, the battle over the chain stores was over. Chain stores were everywhere by the late '60s, early '70s, and it wasn't just groceries. There were shopping centers. Shopping centers were ubiquitous after World War II, and they were full of chains.

Second, and last here and I'll wind up, the Robinson-Patman enforcement led those involved almost unanimously to revolt.

Nothing in antitrust law has ever been so unanimous as what occurred by the late '60s, early '70s against Robinson-Patman. Today's revivalists, who have almost no experience with antitrust with Robinson-Patman, and indeed have no basic knowledge of the statute's origins and activities, they ignore this overwhelming experience from the generations of lawyers, businessmen, economists, and judges, almost all of whom are now, no longer with us.

Joseph V. Coniglio: I definitely want to get into the revival a little bit because it really is key given what we're seeing today. But before I do, Bruce, I want to turn to you. Tim really gave us a great overview of how the act was designed to protect competitors and the harms that it resulted in for consumers and inconsistent with the purpose of antitrust law. But I want to make sure we get the economic take as well, the economic criticisms that were leveled at the Robinson-Patman Act, because they really are very robust. So, could you give us a brief history of that? What were the economists saying while this was going on?

Bruce Kobayashi: Well, one argument that was made about what the Robinson-Patman Act would do is that when large retailers, for example, would obtain volume discounts from suppliers, this would cause the suppliers to increase prices to smaller retailers in order to somehow make up the difference. And this argument made in the '40s is still being made today by the revivalists.

The problem with these arguments is that they're economically incoherent. Profit-maximizing firms presumably are charging the firms, including the large firms and small firms, the profit-maximizing input price before the discounts. And if you increase input prices to small retail firms when large ones obtain discounts, that won't help increase profits, in fact, it'll do the opposite. It will result in supplier profits falling further. This was pointed out to those making such arguments in the '40s, and people making these arguments today are just not paying attention. I have to distinguish these sort of theories that are incoherent from what economists have looked atin the aftermath of the Robinson-Patman Act.

And this is a fairly substantial literature on intermediate good price discrimination. And to model things like regulations, like RPA regulation, economists will model market outcomes where an upstream firm, say Pepsi, charges different profit-maximizing input price to different downstream firms, retailers, Walmart.

What does intermediate price discrimination do? It depends, right? It depends on the model, and the model is often a very simplistic and specialized model. And, if you change some of the assumptions, if you change the model... you can get almost any result.

The theory is at best equivocal on what the effects are and there hasn't been a lot of empirical work testing these theories.

Joseph V. Coniglio: Thanks, Bruce. Your paper, "Stop Making Sense," is the second paper. "Stop Making Sense: Reviving the Robinson-Patman Act and the Economics of Intermediate Price Discrimination" really does lay this out very well. But I want to tie a couple threads together here go forward. We talked about revival, and we talked about the empirical question, right? What does the empirical evidence say? And of course, I don't think it's any news to say that one thing we've learned the past 10 years or so is that even a bad law review article can end up having a very significant impact on antitrust policy.

And we do have this recent study out there by a young, progressive economic thinker, and also, by the way, I think a Yale JD, funnily enough who has this study looking at the liquor industry, which was cited, I believe, by the FTC in one of its ongoing Robinson-Patman Act cases in Southern Glazers. Which as I understand it basically looks at state laws and states that do have Robinson-Patman Act laws at the state level versus those that don't, and says: "Look, prices are higher in the states that don't have the Robinson-Patman Act laws, end of story, right? Time to bring back Robinson-Patman Act enforcement, yeah?"

Bruce Kobayashi: And modern empirical economists now favor the use of causal research designs to study the effect of variations, you know, in state regulations by looking at staggered adoption difference-in-difference event studies. These studies use panel data to measure the causal effect of changes in regulation, by measuring the effect in a treated state before and after the regulation was enacted, relative to control states, right?

These designs in particular seek to control for preexisting cross-sectional differences in the states. This is because, if you do a cross-sectional study, you always have omitted variables, you have reverse causality, and you have a lot of things which sort of prevent you to make a causal inference from the regression analysis.

In contrast, Asil's paper, basically, focuses on the cross-sectional variation, right? Generated by the decades-old adoptions of state-level RPA statutes. And, you know, at best, her results are associational. Her estimated coefficients from the cross-sectional regression analysis cannot identify the causal effect of if you decided to revive the Federal RPA Act and in effect make, intermediate price discrimination, illegal, across the states uniformly.

Bruce, thank you. And in addition to the just limitations causally with the paper, you point out a lot of just the unrealistic assumptions that it makes even on its own terms about, let's say preferring independence to chains and the equally weighted assumption. There's just a lot of flaws in there, and it seems like that paper's being taken way too seriously by folks.

Joseph V. Coniglio: But Tim, I want to turn it back over to you now. We talked about this question of revival, and obviously this paper does not come in isolation; there's a broader rethinking of antitrust that's going on in some circles. And I guess I would just ask you, why is this happening? Where are we right now? Obviously, you had the two cases brought by the Biden administration, one of them, which is still ongoing, with the Trump folks. How does this fit into broader antitrust populism?

Tim Muris: The revivalists make a variety of arguments, and I don't think any of them hold water. And let me tick a few of those off. To begin, the Biden FTC, when it issued in a three-to-two vote its first case, and then shortly thereafter, another one, they ignored the FTC's history, and instead claimed that it [the Robinson-Patman Act] was aimed at oligopoly. Now, that's a really hard argument to make for a statute that the original title was the Wholesale Grocers Protection Act.

Joseph V. Coniglio: Which, by the way, does not have any market power requirement, right? Applies to everybody.

Tim Muris: Ahh, the original. The current statute, and that's something that was read out of the statute in many ways, does require an effect on competition in Section 2(a). And it would be good to read that language to apply again. These oligopoly arguments that the Biden people made, they're making them in terms of power buyers. And again, they're ignoring the FTC's history. Two years before the Robinson-Patman Act, the FTC issued a study about chain stores, and they found that the chain stores had a lot of advantage, and the advantage they had as big buyers were only 10 to 20 percent of the advantages of chain stores. Avoiding middlemen and all the attributes that that has in terms of vertical integration is itself an enormous advantage.

You avoid paying an extra markup, and the revivalists just ignore that. Another easily refutable argument from the revivalists is that Robinson-Patman was abandoned because of Robert Bork and the Reagan administration. That's just chronologically incorrect. Years before Bork's '78 book and Reagan's arrival in 1981, the antitrust world, as I mentioned at the beginning of this podcast, 1969 is well before Bork's book and the Reagan administration. What happened is that opposition arose, and starting from the beginning, it grew in the '50s, and it especially grew in the '60s as the FTC really got going- it got even more aggressive. In 1962, practitioner Fred Rowe published a great book on the Robinson-Patman Act. It was a practitioner's treatise, but that treatise just went chapter and verse on how crazy the Robinson-Patman Act was. Then Philip Elman, an FTC commissioner, he himself started to write dissents, and those dissents, along with other material, he gave speeches, wrote law reviews, those had a big impact.

By the end of the decade, it was harder for the FTC to bring cases because some of his dissents had been adopted by circuit courts. All of this led the FTC to change. The leaders of that 1969 ABA report took over the FTC in the '70s. They cut the cases way back, and it was such a dead letter by the time I was chairman at the beginning of this century, no one even discussed Robinson-Patman.

Joseph V. Coniglio: You mentioned dissents, and I want to go into that because, you know, our brief exchange, it highlighted, I think, an important issue. It's not just the populists, right, who are maybe thinking that we handled Robinson-Patman wrong. I'm thinking of Commissioner Holyoak's dissent in the Southern Glazers case, where we talked about, you know, maybe this law's on the books, we don't have license to ignore it, and maybe there's a way to enforce Robinson-Patman Act in a way that, you know, can protect consumers and not necessarily protect competitors. And it's certainly true that, with respect to primary line price discrimination, the courts have done what they could to bring that into line with standard antitrust practice. What do you make of the attempt to reinvigorate Robinson-Patman within a consumer welfare type framework?

Tim Muris: Sure. Let me address, sort of, three points that are implicated by what you're talking about. One is this idea the revivalists are saying that there's no evidence of costs from previous enforcement. Ironically, you would think that they would say, "There's all this evidence of benefits."

They don't point out the evidence of benefits because there is none. There is lots of evidence of costs. Bruce discussed some, I discussed more earlier, and there's a lot discussed in our papers. On this point of textualism, the textualists have it backwards.

The textualists try to say, "You should enforce the law as written," what they really mean is, "You should enforce the law that didn't pass." The protectionist law. Again, it didn't pass. In fact, what should be enforced is what has been interpreted out of the Robinson-Patman Act, which is the effect on competition. And you mentioned Commissioner Holyoak's paper with Chris Mufarrige. That paper does a very good job of talking about the history of the Morton Salt case, which was a very misguided FTC case, and about how we ought to read Section 2(a), which is the heart of the Robinson-Patman Act, to focus on the language which says you need an effect on competition. Finally, there's this idea we have to enforce the law. That's barren. There are thousands of laws in America with many more tens of thousands of subparts. It's simply impossible to enforce all of them. Even if you look at the FTC, there are consumer protection counterparts that were the heart of FTC consumer protection in the '60s, particularly the Textile, Wool, and Fur Acts.

The way they were enforced was to protect the American textile industries. And there are lots of statutes. You could go chapter and verse, why don't you enforce this one? Why don't you enforce that one? You can't enforce them all. We're awash in laws and thank God they aren't all enforced, or the American economy would grind to a halt. It's crucial to remember that the whole reason the Robinson-Patman Act came into existence is gone. It's done. It doesn't mean that small merchants have not survived; they're no longer dominant, but many small merchants survive in many guises. But the statute has no place in protecting them and, being interpreted just to protect them. It should be interpreted to protect consumers like the rest of antitrust law.

Bruce Kobayashi: Thanks, Tim. And I think also no final victory on that question of what competitive injury means. I think there's still a lot of debate about whether that's harm to competitors or harm to consumers, and we'll just have to see how that plays out.

Joseph V. Coniglio: But Bruce, turning it over to you now. Tim mentioned sort of the new textualist approach maybe for doing some rethinking of the Robinson-Patman Act. Can you just briefly give us a sense of, what is the modern economic consensus now on price discrimination? Are there new theories we should be thinking about?

I know you mentioned the waterbed theory. Where is the economic literature and consensus at this moment?

Bruce Kobayashi: So, the theoretical literature really is a widely diverse and widely inconclusive literature. I do want to say one thing that Tim mentioned, one of the things driving getting rid of the wholesalers by creating chain stores was that you have a problem called double marginalization.

This is not a new thing. The basic analysis was done by Augustin Cournot in the 1800s, right? And there's a name, it's called Cournot complements. And, two firms in a vertical chain or three firms in a vertical chain they have this problem where the upstream firm will sell to the downstream firm.

The downstream firm will take that input price, which is marked up from cost, and do a second markup, and the result is there's this pricing externality that they don't take into account, the effects on each other. And the joint margin where two firms are pricing independently in a vertical chain or with complements in the Cournot situation, is that those two margins are greater than the joint profit maximizing margins that would be set by a vertically integrated seller.

And there's a famous article by Joseph Spengler in 1950 which basically explained why A&P should get rid of wholesalers. One reason. And in these days, if you look at the FTC's cases, right? Here you still have an upstream firm selling booze or Pepsi and a downstream retail firm who has economic market power, not maybe antitrust market power, but they have a downward sloping demand curve.

And in that situation, it's ubiquitous in branded goods, you have double marginalization, and if the firms can coordinate and get together and solve that double marginalization problem, they get more output. Both firms make more profits. Consumers get to buy more at lower retail prices.

It's Pareto for all the people involved within that vertical chain. And Spengler said "Yeah, a chain store getting rid of the wholesaler, that's vertical integration. That's one solution."

If you're Pepsi, and you're selling to a multi-good retailer like Walmart or Target or something, right? The vertical integration is not this a viable solution for many reasons, right? Who among the thousands of products that store sells is going to be the one who vertically integrates? Or do you have a co-op manufacturer organization? So, there are other ways to deal with double marginalization, and one that has been identified is: use nonlinear pricing.

And so, there's this thing called two-part tariffs, where you have a fixed fee and then a marginal fee. But there was this great paper written in 2004 by Kolay, Ordover and Shaffer, which showed that, the thing that really is capturing the attention of the revivalists- volume discounts- and the particular, bad form of it called all units volume discounts, is a way in which firms, through pricing mechanisms, deal with sort of this double marginalization.

And if you think about it, they set a threshold. You say you want a low price, not on just units above the threshold, but on every unit from zero to the threshold, explain to me why you are doing that. We want you to go and sell a lot of units, right? And so, you set high thresholds.

What does the downstream retailer do? They have to lower their margins, right? That's double marginalization. If they don't lower their margins and they basically say, "Yeah, we want to take enough to trigger the threshold and get the low price," if they don't actually lower their margins, then they're going to have a lot of cola piling up in their stockroom.

So, it's a way in which you try and address the double marginalization problem. Kolay, Ordover, and Shaffer show that, in some instances, it dominates use of efficient two-part tariffs, where you sell the input at marginal cost as the supplier to the retailer and tell the retailer, "Okay, give us a bag of cash."

But, really, if you're thinking about the defenses, the meeting competition or cost justification, you're really not going to see those efficiency benefits and the reasons that these things are used. You're not going to find some measurement which will satisfy the defenses.

And really what RPA will do is it will frustrate, just like the attack on A&P did, it'll frustrate ways in which firms try to solve basic economic problems within a vertical chain. I have to say, to the extent Holyoak and Mufarrige's paper, to the extent there is a residual problem, it's probably, that you use volume discounts as a form of foreclosure or raising rivals' costs.

We don't need Robinson-Patman to deal with that. We have something called Section 2 of the Sherman Act, right? And those analyses under Section 2 are much more focused on the effects of the particular conduct than using the Morton Salt analysis, or, there's a really funny video in the Southern Glazer's cases about the millions of paired transactions. Google it.

But that analysis really isn't focused on anything related to why you'd want to come up with things like volume discounts and use them in a vertical chain.

Tim Muris: Bruce, his analysis of the economics is what great economists do. And it's a little frustrating in the sense of what Ronald Coase once said that an economist will tell you that collectivization will lead to starvation, but he won't tell you whether that's good or bad. And look, the truth is and we say this in our joint paper, and I say this in our paper, there are special cases where you can hypothesize that price differences are anti-competitive, but overwhelmingly economists are opposed to banning-to restrictions, broad-based restrictions, which is how Robinson-Patman-revivalists want to enforce Robinson-Patman on price discrimination. And the economics literature supports that position. What the economics literature can't show is there's no case out there where competitive problems are impossible. And therefore, we need a statute, and as Bruce says, we have one. We have Section 2 of the Sherman Act.

Joseph V. Coniglio: Tim, thanks. I see we're nearly at the end of our episode here, so I want to conclude, if I may, and pose one last question to you. And I guess I'm saying this with some inside knowledge having worked for you. Over your long and illustrious career, you have a number of stories that you can tell about the history of antitrust and people you've met along the way. Do you have any good ones with Robinson-Patman you might mind sharing with us?

Tim Muris: Some of the characters here and their involvement at the FTC in the relevant time is worth retelling. The Kennedy administration wanted each agency to have a prominent commissioner. In some agencies, like the FCC, it was the chairman, and that was the now legendary Newton Minow. At the FTC, it was Phil Elman, who was a non-chairman. Elman had been prominent in the solicitor general's office. He'd been involved in the Brown v. Board case. And Elman quickly recognized the problems with the Robinson-Patman Act, and he led an internal revolt. His dissent speeches, I mentioned this a little bit before, and law review articles became a key part of the consensus, and it was those dissents that I mentioned that helped restrict the number of cases and improve the burden. It was Elman's prominence that led a young Richard Posner to become an attorney advisor to Elman.

Now, Posner had the best record you can possibly have. He graduated from Harvard number one in his class, president of the Law Review, and he clerked for Justice Brennan on the Supreme Court. Where did he go from there? He went to work for Phil Elman. That was the stature that Phil Elman had. And it was there that Posner learned from Elman and he too became an opponent of the Robinson-Patman. This was not the Posner we know. This is not the law and economics Posner. This was the legal positive, the legal realist Posner from the Chicago School.

An anecdote about that Posner and Elman slightly different than RP: in 1964, and I learned this anecdote in part 20 years later, when I was director of the Bureau of Competition, I was in my outer office, and the lead secretary heard Dick Posner's name, and her eyes lit up, and she said, "Richard Posner?" And I said, "You know him?" And she said, "Oh, yes, he's the world's fastest typist." And having seen him in person it's literally true.

And what had happened is, in 1964, the surgeon general issued a report that said smoking was dangerous, and the FTC did something brave. The '60s were not a good decade for the FTC, but this was a brave exception. They issued a rule that required warning labels on cigarettes. Now, Congress preempted that with its own label, but Posner was the lead draftsman of the statement of basis and purpose. And the guy literally could type amazingly fast.

He put that out, and it was eclectic. It was part economics. It was part public policy. It was part philosophy. I once introduced Dick for a speech, and I explained his typing skills among other things. And I said, and this is true, "I taught comparative advantage with Posner thinking and Posner typing." And Dick, who would not be one-upped, he got up and thanked me, and he said, " Tim, I think better while I type."

Joseph V. Coniglio: Only the things you can learn on the Schumpeter podcast. Not only Robinson-Patman, but how fast Richard Posner can type. What a great episode. Tim, Bruce, I want to thank you both for joining us. Again, this has really been an erudite and fun discussion. For everybody who tuned in, thank you for taking the time.

Please stay tuned for our next episode coming out next month on ITIF's Creative Discussion podcast. And really appreciate everybody here listening in.

Thanks so much and have a great day. ​

Joseph V. Coniglio host two guests, Tim Muris, Foundation Professor of Law at Antonin Scalia Law School, and Bruce Kobayashi, Paige V. and Henry N. Butler Chair in Law and Economics at Antonin Scalia Law School, to discuss the Robinson-Patman Act and its renewed enforcement.

00:00 Welcome and Series Intro

01:12 Meet the Guests

02:46 What Is Robinson-Patman

03:31 Origins and Chain Store Backlash

06:37 Enforcement Harms and FTC Overreach

10:13 Economists Critique the Act

12:54 Bad Empirics and Revival Claims

15:31 Why the Act Is Back

19:13 Textualism and Consumer Welfare

22:42 Modern Economics of Price Discrimination

23:11 Double Marginalization and Volume Discounts

29:51 FTC History Stories and Wrap Up

Publications Mentioned

Bruce Kobayashi and Timothy J. Muris. "Stop Making Sense: Reviving the Robinson-Patman Act and the Economics of Intermediate Price Discrimination," Competitive Enterprise Institute.

Timothy J. Muris. "Zombie Antitrust: Is Robinson-Patman a Dead Law Walking?" Competitive Enterprise Institute.

Melissa Holyoak and Christopher G. Mufarrige. "From Protecting Competitors to Protecting Competition: The Past, Present, and Future of the Robinson-Patman Act," Antitrust Law Journal 87, no. 2 (2025).

Bork, Robert H. The Antitrust Paradox: A Policy at War with Itself. New York: Basic Books, 1978.

Sreya Kolay, Janusz Ordover, and Greg Shaffer. "All-Units Discounts in Retail Contracts," Journal of Economics & Management Strategy 13, no. 3 (2004): 429-59.

Frederick M. Rowe, Price Discrimination Under the Robinson-Patman Act. Boston: Little, Brown and Company, 1962.

Joseph J. Spengler, "Vertical Integration and Antitrust Policy," Journal of Political Economy 58, no. 4 (1950): 347-52.

Cases Mentioned

Federal Trade Commission v. Morton Salt Co.

Federal Trade Commission v. Southern Glazer's Wine and Spirits, LLC.

Auto-Transcript

Joseph V. Coniglio: Thank you for joining us. My name is Joseph Coniglio and I am senior counsel and director of antitrust and innovation policy and the Schumpeter Project on Competition Policy here at the Information Technology and Innovation Foundation, ITIF.

And I'm proud to announce the release of our fifth episode of our new antitrust speaker series, Creative Discussion. We're channeling Schumpeter's idea of creative destruction. We'll be having wide-ranging and in-depth discussions with antitrust's greatest luminaries to discuss cutting edge issues in antitrust, tech, economics, and beyond, as well as get to know a little bit more about some of the leading voices within the antitrust community. With that, why don't we get started?

And I'm really very glad we've got a special program for this episode, where we'll be featuring not one, but two guests, I think, a pro-competitive bundling, which I think both of our guests would agree. We've got some really great new papers out that we're going to focus our conversation on. And when I announce our speakers, you'll see why we've narrowed the scope, as it would really take hours for us to give justice to their amazing careers in antitrust law.

So first we've got Tim Muris, foundation professor of law at the Antonin Scalia Law School and George Mason University, and senior counsel at Sidley Austin. Tim was chair of the FTC from 2000 to 2004, and has the distinction of being the only person to have directed both of the FTC's enforcement arms: Bureau of Competition, Bureau of Consumer Protection. His distinguished career includes a number of other positions in government, lots of work in private practice, as well as over a hundred and thirty books, monographs, articles, and other publications. Tim, I can say in full disclosure, was also my former boss at a time and really a great mentor. So thanks for being here, Tim.

Joining Tim is Bruce Kobayashi, professor and Paige V. and Henry N. Butler Chair in Law and Economics at the Antonin Scalia Law School at George Mason, where he teaches and publishes widely in antitrust, IP, and a number of other topics. Bruce served for many years as an economist at both the FTC and DOJ, most recently in a prior administration as director of the FTC's Bureau of Economics. And Bruce has also published dozens of books, monographs, and articles over the course of his distinguished career. Welcome, Bruce.

Bruce Kobayashi: Thanks to you; thanks for having me.

Joseph V. Coniglio: Sure. So okay, Tim, why don't we start with you?

So you and Bruce, you've got these two great papers that came out a few months ago over at the Competitive Enterprise Institute, a really great think tank I'd recommend to our listeners. Please do check it out.

On the notorious Robinson-Patman Act, which as we'll get into, is the major statute restricting price discrimination when we think about business-to-business arrangements up the supply chain. Now why don't we start with one of the articles that you've authored titled: "Zombie Antitrust: Is Robinson-Patman a Dead Law Walking?" But first before we get into that, tell us more about what Robinson-Patman is and maybe how it got started before it reached its status now its zombie status. Please, go ahead.

Tim Muris: Sure. And I wanted to thank you, Joe, and thanks to ITIF for inviting us. A hundred years ago almost all Americans purchased their products and especially groceries, from small stores that used middlemen to coordinate between the retailers and those who made the products. In fact, my maternal grandfather ran such a store in a small town in northeastern Ohio for a good chunk of the first half of the 20th century. Then, around 100 years ago, mass marketers were arising, including chain stores, the most famous of which was the Great Atlantic & Pacific Tea Company, the A&P for short. It was the largest retailer in the United States for 40 years, and it no longer exists. These stores used a new business model that bypassed the middleman. They relied on vertical integration, bulk purchases, and superior use of data.

Now, unsurprisingly, the incumbents reacted to the retailing revolution, and the reaction got especially strong during the Great Depression. The Roosevelt administration first attempted to cure the Depression, believe it or not, by raising prices through something called the National Recovery Administration, whose famous symbol was the blue eagle.

The NRA used codes of what were called fair competition- some of which attempted to stifle the new chain stores to protect the old firms. The Supreme Court, however, said the NRA was unconstitutional in 1935. 15 days after that Supreme Court decision, Wright Patman, who was from Texas, struck. The bill written by the Wholesalers Trade Association was called the Wholesaler Grocers Protection Act, and it mimicked those NRA codes to restrain the A&Ps of the world from bypassing the wholesalers. Senator Robinson quickly joined, but their bill couldn't pass when the Roosevelt administration and others opposed. A bill did pass, but it was changed substantially with new defenses, complexity, and considerable ambiguity. That bill became the FTC's primary competition weapon through the 1960s. Despite the deviation from the original proposal, the FTC interpreted the act as if it protected the inefficient from the new competitors.

Joseph V. Coniglio: I don't want to be guilty of the genetic fallacy here, but it really does seem that Robinson-Patman was born in regulatory capture. A really great example of that. But again, doesn't necessarily have to turn out badly. But you have this great section in your paper where you highlight how it did, specifically on how the act and its enforcement did harm competition and consumers, and I want to focus on that.

And of course, we have this broader idea from Bork in the '70s about how antitrust policies can be at war with themselves. And I think, as you really highlight, that Robinson-Patman Act really was a case in point and a great example of that. So, why don't you give us a brief overview of the history of the enforcement of the Robinson-Patman Act and why it did indeed turn out so badly.

Tim Muris: Well, just a few examples, and remember the original idea was to protect this wholesaler model from the new competition, especially from these chain stores. One example is, consider that there was a meeting competition defense added, and for decades, the commission unnecessarily restricted the defense, made it hard to use, which was, that was anti-competitive in itself. But the ways it did so were even more troubling. For example, and most troubling, the FTC wanted direct competitors to check each other's prices. It was like they wanted Pepsi and Coke to call each other and say, "Hey, what prices are you charging?"

Today, we would consider such checking evidence of price fixing. They also discouraged selective price cuts, and selective price cuts have been shown as a way to increase competition, especially in concentrated industries. The report that you discussed, discusses lots of problematic FTC interpretations, and let me just list a few more. One was: They forced retailers who often, when they dropped off goods at their store, would pick up other goods so their trucks wouldn't return empty. It forced trucks to, in fact, travel empty. That was, of course, inefficient- having trucks on the road that were empty. That cost hundreds of millions of dollars.

They also discouraged the most efficient forms of warehousing goods. Goods had to be stored sometimes, you know, between the manufacturer and the stores. And the Robinson-Patman Act had a prohibition on paying brokerage except for services rendered, and the FTC would apply that, sometimes, even when brokerage was paid. Now, it's true that modern courts are more hostile than past ones, but there's still a lot of these old, bad FTC laws on the books and old cases, and those old cases have come back to bite. There are recent, for example, Ninth Circuit district and appellate court decisions that rely on these old cases in problematic ways.

Now, the most important evidence about the FTC, about the Robinson-Patman Act, however, was how the people involved reacted to it. By 1969, there was an American Bar Association report on the FTC. The antitrust world was decisively against the FTC, and two facts were most crucial.

First, the battle over the chain stores was over. Chain stores were everywhere by the late '60s, early '70s, and it wasn't just groceries. There were shopping centers. Shopping centers were ubiquitous after World War II, and they were full of chains.

Second, and last here and I'll wind up, the Robinson-Patman enforcement led those involved almost unanimously to revolt.

Nothing in antitrust law has ever been so unanimous as what occurred by the late '60s, early '70s against Robinson-Patman. Today's revivalists, who have almost no experience with antitrust with Robinson-Patman, and indeed have no basic knowledge of the statute's origins and activities, they ignore this overwhelming experience from the generations of lawyers, businessmen, economists, and judges, almost all of whom are now, no longer with us.

Joseph V. Coniglio: I definitely want to get into the revival a little bit because it really is key given what we're seeing today. But before I do, Bruce, I want to turn to you. Tim really gave us a great overview of how the act was designed to protect competitors and the harms that it resulted in for consumers and inconsistent with the purpose of antitrust law. But I want to make sure we get the economic take as well, the economic criticisms that were leveled at the Robinson-Patman Act, because they really are very robust. So, could you give us a brief history of that? What were the economists saying while this was going on?

Bruce Kobayashi: Well, one argument that was made about what the Robinson-Patman Act would do is that when large retailers, for example, would obtain volume discounts from suppliers, this would cause the suppliers to increase prices to smaller retailers in order to somehow make up the difference. And this argument made in the '40s is still being made today by the revivalists.

The problem with these arguments is that they're economically incoherent. Profit-maximizing firms presumably are charging the firms, including the large firms and small firms, the profit-maximizing input price before the discounts. And if you increase input prices to small retail firms when large ones obtain discounts, that won't help increase profits, in fact, it'll do the opposite. It will result in supplier profits falling further. This was pointed out to those making such arguments in the '40s, and people making these arguments today are just not paying attention. I have to distinguish these sort of theories that are incoherent from what economists have looked atin the aftermath of the Robinson-Patman Act.

And this is a fairly substantial literature on intermediate good price discrimination. And to model things like regulations, like RPA regulation, economists will model market outcomes where an upstream firm, say Pepsi, charges different profit-maximizing input price to different downstream firms, retailers, Walmart.

What does intermediate price discrimination do? It depends, right? It depends on the model, and the model is often a very simplistic and specialized model. And, if you change some of the assumptions, if you change the model... you can get almost any result.

The theory is at best equivocal on what the effects are and there hasn't been a lot of empirical work testing these theories.

Joseph V. Coniglio: Thanks, Bruce. Your paper, "Stop Making Sense," is the second paper. "Stop Making Sense: Reviving the Robinson-Patman Act and the Economics of Intermediate Price Discrimination" really does lay this out very well. But I want to tie a couple threads together here go forward. We talked about revival, and we talked about the empirical question, right? What does the empirical evidence say? And of course, I don't think it's any news to say that one thing we've learned the past 10 years or so is that even a bad law review article can end up having a very significant impact on antitrust policy.

And we do have this recent study out there by a young, progressive economic thinker, and also, by the way, I think a Yale JD, funnily enough who has this study looking at the liquor industry, which was cited, I believe, by the FTC in one of its ongoing Robinson-Patman Act cases in Southern Glazers. Which as I understand it basically looks at state laws and states that do have Robinson-Patman Act laws at the state level versus those that don't, and says: "Look, prices are higher in the states that don't have the Robinson-Patman Act laws, end of story, right? Time to bring back Robinson-Patman Act enforcement, yeah?"

Bruce Kobayashi: And modern empirical economists now favor the use of causal research designs to study the effect of variations, you know, in state regulations by looking at staggered adoption difference-in-difference event studies. These studies use panel data to measure the causal effect of changes in regulation, by measuring the effect in a treated state before and after the regulation was enacted, relative to control states, right?

These designs in particular seek to control for preexisting cross-sectional differences in the states. This is because, if you do a cross-sectional study, you always have omitted variables, you have reverse causality, and you have a lot of things which sort of prevent you to make a causal inference from the regression analysis.

In contrast, Asil's paper, basically, focuses on the cross-sectional variation, right? Generated by the decades-old adoptions of state-level RPA statutes. And, you know, at best, her results are associational. Her estimated coefficients from the cross-sectional regression analysis cannot identify the causal effect of if you decided to revive the Federal RPA Act and in effect make, intermediate price discrimination, illegal, across the states uniformly.

Bruce, thank you. And in addition to the just limitations causally with the paper, you point out a lot of just the unrealistic assumptions that it makes even on its own terms about, let's say preferring independence to chains and the equally weighted assumption. There's just a lot of flaws in there, and it seems like that paper's being taken way too seriously by folks.

Joseph V. Coniglio: But Tim, I want to turn it back over to you now. We talked about this question of revival, and obviously this paper does not come in isolation; there's a broader rethinking of antitrust that's going on in some circles. And I guess I would just ask you, why is this happening? Where are we right now? Obviously, you had the two cases brought by the Biden administration, one of them, which is still ongoing, with the Trump folks. How does this fit into broader antitrust populism?

Tim Muris: The revivalists make a variety of arguments, and I don't think any of them hold water. And let me tick a few of those off. To begin, the Biden FTC, when it issued in a three-to-two vote its first case, and then shortly thereafter, another one, they ignored the FTC's history, and instead claimed that it [the Robinson-Patman Act] was aimed at oligopoly. Now, that's a really hard argument to make for a statute that the original title was the Wholesale Grocers Protection Act.

Joseph V. Coniglio: Which, by the way, does not have any market power requirement, right? Applies to everybody.

Tim Muris: Ahh, the original. The current statute, and that's something that was read out of the statute in many ways, does require an effect on competition in Section 2(a). And it would be good to read that language to apply again. These oligopoly arguments that the Biden people made, they're making them in terms of power buyers. And again, they're ignoring the FTC's history. Two years before the Robinson-Patman Act, the FTC issued a study about chain stores, and they found that the chain stores had a lot of advantage, and the advantage they had as big buyers were only 10 to 20 percent of the advantages of chain stores. Avoiding middlemen and all the attributes that that has in terms of vertical integration is itself an enormous advantage.

You avoid paying an extra markup, and the revivalists just ignore that. Another easily refutable argument from the revivalists is that Robinson-Patman was abandoned because of Robert Bork and the Reagan administration. That's just chronologically incorrect. Years before Bork's '78 book and Reagan's arrival in 1981, the antitrust world, as I mentioned at the beginning of this podcast, 1969 is well before Bork's book and the Reagan administration. What happened is that opposition arose, and starting from the beginning, it grew in the '50s, and it especially grew in the '60s as the FTC really got going- it got even more aggressive. In 1962, practitioner Fred Rowe published a great book on the Robinson-Patman Act. It was a practitioner's treatise, but that treatise just went chapter and verse on how crazy the Robinson-Patman Act was. Then Philip Elman, an FTC commissioner, he himself started to write dissents, and those dissents, along with other material, he gave speeches, wrote law reviews, those had a big impact.

By the end of the decade, it was harder for the FTC to bring cases because some of his dissents had been adopted by circuit courts. All of this led the FTC to change. The leaders of that 1969 ABA report took over the FTC in the '70s. They cut the cases way back, and it was such a dead letter by the time I was chairman at the beginning of this century, no one even discussed Robinson-Patman.

Joseph V. Coniglio: You mentioned dissents, and I want to go into that because, you know, our brief exchange, it highlighted, I think, an important issue. It's not just the populists, right, who are maybe thinking that we handled Robinson-Patman wrong. I'm thinking of Commissioner Holyoak's dissent in the Southern Glazers case, where we talked about, you know, maybe this law's on the books, we don't have license to ignore it, and maybe there's a way to enforce Robinson-Patman Act in a way that, you know, can protect consumers and not necessarily protect competitors. And it's certainly true that, with respect to primary line price discrimination, the courts have done what they could to bring that into line with standard antitrust practice. What do you make of the attempt to reinvigorate Robinson-Patman within a consumer welfare type framework?

Tim Muris: Sure. Let me address, sort of, three points that are implicated by what you're talking about. One is this idea the revivalists are saying that there's no evidence of costs from previous enforcement. Ironically, you would think that they would say, "There's all this evidence of benefits."

They don't point out the evidence of benefits because there is none. There is lots of evidence of costs. Bruce discussed some, I discussed more earlier, and there's a lot discussed in our papers. On this point of textualism, the textualists have it backwards.

The textualists try to say, "You should enforce the law as written," what they really mean is, "You should enforce the law that didn't pass." The protectionist law. Again, it didn't pass. In fact, what should be enforced is what has been interpreted out of the Robinson-Patman Act, which is the effect on competition. And you mentioned Commissioner Holyoak's paper with Chris Mufarrige. That paper does a very good job of talking about the history of the Morton Salt case, which was a very misguided FTC case, and about how we ought to read Section 2(a), which is the heart of the Robinson-Patman Act, to focus on the language which says you need an effect on competition. Finally, there's this idea we have to enforce the law. That's barren. There are thousands of laws in America with many more tens of thousands of subparts. It's simply impossible to enforce all of them. Even if you look at the FTC, there are consumer protection counterparts that were the heart of FTC consumer protection in the '60s, particularly the Textile, Wool, and Fur Acts.

The way they were enforced was to protect the American textile industries. And there are lots of statutes. You could go chapter and verse, why don't you enforce this one? Why don't you enforce that one? You can't enforce them all. We're awash in laws and thank God they aren't all enforced, or the American economy would grind to a halt. It's crucial to remember that the whole reason the Robinson-Patman Act came into existence is gone. It's done. It doesn't mean that small merchants have not survived; they're no longer dominant, but many small merchants survive in many guises. But the statute has no place in protecting them and, being interpreted just to protect them. It should be interpreted to protect consumers like the rest of antitrust law.

Bruce Kobayashi: Thanks, Tim. And I think also no final victory on that question of what competitive injury means. I think there's still a lot of debate about whether that's harm to competitors or harm to consumers, and we'll just have to see how that plays out.

Joseph V. Coniglio: But Bruce, turning it over to you now. Tim mentioned sort of the new textualist approach maybe for doing some rethinking of the Robinson-Patman Act. Can you just briefly give us a sense of, what is the modern economic consensus now on price discrimination? Are there new theories we should be thinking about?

I know you mentioned the waterbed theory. Where is the economic literature and consensus at this moment?

Bruce Kobayashi: So, the theoretical literature really is a widely diverse and widely inconclusive literature. I do want to say one thing that Tim mentioned, one of the things driving getting rid of the wholesalers by creating chain stores was that you have a problem called double marginalization.

This is not a new thing. The basic analysis was done by Augustin Cournot in the 1800s, right? And there's a name, it's called Cournot complements. And, two firms in a vertical chain or three firms in a vertical chain they have this problem where the upstream firm will sell to the downstream firm.

The downstream firm will take that input price, which is marked up from cost, and do a second markup, and the result is there's this pricing externality that they don't take into account, the effects on each other. And the joint margin where two firms are pricing independently in a vertical chain or with complements in the Cournot situation, is that those two margins are greater than the joint profit maximizing margins that would be set by a vertically integrated seller.

And there's a famous article by Joseph Spengler in 1950 which basically explained why A&P should get rid of wholesalers. One reason. And in these days, if you look at the FTC's cases, right? Here you still have an upstream firm selling booze or Pepsi and a downstream retail firm who has economic market power, not maybe antitrust market power, but they have a downward sloping demand curve.

And in that situation, it's ubiquitous in branded goods, you have double marginalization, and if the firms can coordinate and get together and solve that double marginalization problem, they get more output. Both firms make more profits. Consumers get to buy more at lower retail prices.

It's Pareto for all the people involved within that vertical chain. And Spengler said "Yeah, a chain store getting rid of the wholesaler, that's vertical integration. That's one solution."

If you're Pepsi, and you're selling to a multi-good retailer like Walmart or Target or something, right? The vertical integration is not this a viable solution for many reasons, right? Who among the thousands of products that store sells is going to be the one who vertically integrates? Or do you have a co-op manufacturer organization? So, there are other ways to deal with double marginalization, and one that has been identified is: use nonlinear pricing.

And so, there's this thing called two-part tariffs, where you have a fixed fee and then a marginal fee. But there was this great paper written in 2004 by Kolay, Ordover and Shaffer, which showed that, the thing that really is capturing the attention of the revivalists- volume discounts- and the particular, bad form of it called all units volume discounts, is a way in which firms, through pricing mechanisms, deal with sort of this double marginalization.

And if you think about it, they set a threshold. You say you want a low price, not on just units above the threshold, but on every unit from zero to the threshold, explain to me why you are doing that. We want you to go and sell a lot of units, right? And so, you set high thresholds.

What does the downstream retailer do? They have to lower their margins, right? That's double marginalization. If they don't lower their margins and they basically say, "Yeah, we want to take enough to trigger the threshold and get the low price," if they don't actually lower their margins, then they're going to have a lot of cola piling up in their stockroom.

So, it's a way in which you try and address the double marginalization problem. Kolay, Ordover, and Shaffer show that, in some instances, it dominates use of efficient two-part tariffs, where you sell the input at marginal cost as the supplier to the retailer and tell the retailer, "Okay, give us a bag of cash."

But, really, if you're thinking about the defenses, the meeting competition or cost justification, you're really not going to see those efficiency benefits and the reasons that these things are used. You're not going to find some measurement which will satisfy the defenses.

And really what RPA will do is it will frustrate, just like the attack on A&P did, it'll frustrate ways in which firms try to solve basic economic problems within a vertical chain. I have to say, to the extent Holyoak and Mufarrige's paper, to the extent there is a residual problem, it's probably, that you use volume discounts as a form of foreclosure or raising rivals' costs.

We don't need Robinson-Patman to deal with that. We have something called Section 2 of the Sherman Act, right? And those analyses under Section 2 are much more focused on the effects of the particular conduct than using the Morton Salt analysis, or, there's a really funny video in the Southern Glazer's cases about the millions of paired transactions. Google it.

But that analysis really isn't focused on anything related to why you'd want to come up with things like volume discounts and use them in a vertical chain.

Tim Muris: Bruce, his analysis of the economics is what great economists do. And it's a little frustrating in the sense of what Ronald Coase once said that an economist will tell you that collectivization will lead to starvation, but he won't tell you whether that's good or bad. And look, the truth is and we say this in our joint paper, and I say this in our paper, there are special cases where you can hypothesize that price differences are anti-competitive, but overwhelmingly economists are opposed to banning-to restrictions, broad-based restrictions, which is how Robinson-Patman-revivalists want to enforce Robinson-Patman on price discrimination. And the economics literature supports that position. What the economics literature can't show is there's no case out there where competitive problems are impossible. And therefore, we need a statute, and as Bruce says, we have one. We have Section 2 of the Sherman Act.

Joseph V. Coniglio: Tim, thanks. I see we're nearly at the end of our episode here, so I want to conclude, if I may, and pose one last question to you. And I guess I'm saying this with some inside knowledge having worked for you. Over your long and illustrious career, you have a number of stories that you can tell about the history of antitrust and people you've met along the way. Do you have any good ones with Robinson-Patman you might mind sharing with us?

Tim Muris: Some of the characters here and their involvement at the FTC in the relevant time is worth retelling. The Kennedy administration wanted each agency to have a prominent commissioner. In some agencies, like the FCC, it was the chairman, and that was the now legendary Newton Minow. At the FTC, it was Phil Elman, who was a non-chairman. Elman had been prominent in the solicitor general's office. He'd been involved in the Brown v. Board case. And Elman quickly recognized the problems with the Robinson-Patman Act, and he led an internal revolt. His dissent speeches, I mentioned this a little bit before, and law review articles became a key part of the consensus, and it was those dissents that I mentioned that helped restrict the number of cases and improve the burden. It was Elman's prominence that led a young Richard Posner to become an attorney advisor to Elman.

Now, Posner had the best record you can possibly have. He graduated from Harvard number one in his class, president of the Law Review, and he clerked for Justice Brennan on the Supreme Court. Where did he go from there? He went to work for Phil Elman. That was the stature that Phil Elman had. And it was there that Posner learned from Elman and he too became an opponent of the Robinson-Patman. This was not the Posner we know. This is not the law and economics Posner. This was the legal positive, the legal realist Posner from the Chicago School.

An anecdote about that Posner and Elman slightly different than RP: in 1964, and I learned this anecdote in part 20 years later, when I was director of the Bureau of Competition, I was in my outer office, and the lead secretary heard Dick Posner's name, and her eyes lit up, and she said, "Richard Posner?" And I said, "You know him?" And she said, "Oh, yes, he's the world's fastest typist." And having seen him in person it's literally true.

And what had happened is, in 1964, the surgeon general issued a report that said smoking was dangerous, and the FTC did something brave. The '60s were not a good decade for the FTC, but this was a brave exception. They issued a rule that required warning labels on cigarettes. Now, Congress preempted that with its own label, but Posner was the lead draftsman of the statement of basis and purpose. And the guy literally could type amazingly fast.

He put that out, and it was eclectic. It was part economics. It was part public policy. It was part philosophy. I once introduced Dick for a speech, and I explained his typing skills among other things. And I said, and this is true, "I taught comparative advantage with Posner thinking and Posner typing." And Dick, who would not be one-upped, he got up and thanked me, and he said, " Tim, I think better while I type."

Joseph V. Coniglio: Only the things you can learn on the Schumpeter podcast. Not only Robinson-Patman, but how fast Richard Posner can type. What a great episode. Tim, Bruce, I want to thank you both for joining us. Again, this has really been an erudite and fun discussion. For everybody who tuned in, thank you for taking the time.

Please stay tuned for our next episode coming out next month on ITIF's Creative Discussion podcast. And really appreciate everybody here listening in.

Thanks so much and have a great day. ​