Laissez-faire proponents contend that the government can serve a valuable role in
encouraging firms to engage in research and development by creating a patent system.
32. The Sherman Antitrust Act of 1890 proved to be not sufficiently specific to curb
monopoly power in the United States.
33. The Clayton Act allowed board members of one corporation to sit on the board of a
competing firm as long as inside information was not transmitted.
34. For the courts, being too big a firm in an industry can be sufficient grounds, using the per
se criterion, to charge the firm with violating antitrust laws.
35. Since the 1980s, the Congressional budget has allocated substantial funds to antitrust
investigation and enforcement, which is why the Antitrust Division of the Department of
Justice is one of the most vigorous agencies of government today.
36. A “consent decree” is one way in which an enterprise may avoid antitrust prosecution.
37. Creative destruction theory is essentially an argument that profit potential within a
noncompetitive industry creates an incentive for new types of competing industry,
thereby strengthening the original industry’s market power.
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