Income transfer is a tangible and obvious effect of monopolistic pricing. Resource allocation is an intangible and subtle effect. It is clear from the congressional debates that senators knew that monopolistic pricing transferred income from consumers to producers. Speaking in support oh his bill, Senator Sherman said;
This bill does not seek to cripple combination of capital and labor, the formation of partnership or of corporations, but only to prevent and control combination made with a view to prevent competition, or for the restraint of trade, or to increase the profits of the producer at the cost of the consumer emphasis added.
Bork describes this as a consumer welfare goal, which by ordinary usage might be taken to mean the maximization of consumer surplus or, equivalently, the minimization of profits plus dead weight loss. It is by now reasonably well understood in the literature that what Bork means by consumers welfare would be more descriptively referred to as producer plus consumer welfare; in the phrase of the march 1987 national association of attorneys general horizontal merger guidelines: “for the unwary judge or practitioner stumbling upon this term it is important to understand . . . that ‘consumer welfare’, when used in this manner, has nothing to do with the welfare of consumers. “ on pedagogical grounds, it seems best to avoid Bork’s misleading terminology in a textbook.
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