# Sherman Antitrust Act (1890) On **July 2, 1890**, President [[Benjamin Harrison]] signed the Sherman Antitrust Act — the first federal law prohibiting monopolies and conspiracies to restrain trade. Passed near-unanimously (Senate 51–1, House 242–0) in response to public outrage at Gilded Age trusts — particularly [[Standard Oil]], the sugar trust, and the railroad cartels — the Sherman Act established the principle that **concentrated corporate power is a legitimate concern of democratic government** and that the federal government has the authority to break up private monopolies. The Sherman Act matters for the KB as the **origin of the regulatory state** — the first assertion of government power over private capital that every subsequent conservative movement has tried to weaken, reinterpret, or reverse. Its history is the history of the eternal American argument about whether markets should be free from government interference or free from monopoly domination. ## What It Did The Act's two key provisions are deceptively simple: **Section 1:** "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal." **Section 2:** "Every person who shall monopolize, or attempt to monopolize... any part of the trade or commerce among the several States... shall be deemed guilty of a felony." ## The Paradox of Early Enforcement The Sherman Act's first two decades revealed a devastating irony: **Used against labor, not capital:** In its first decade, the Sherman Act was used more aggressively against labor unions (treating strikes as "conspiracies in restraint of trade") than against the monopolies it was designed to address. The [[Pullman Strike]] (1894) was broken with a Sherman Act injunction. Courts consistently treated labor organizing as illegal restraint of trade while permitting corporate consolidation. **Toothless against trusts:** Standard Oil continued growing after 1890. [[J.P. Morgan]] organized U.S. Steel (1901), the largest corporation in the world, without serious antitrust challenge. The Act lacked enforcement mechanisms and clear standards until the Roosevelt and Taft administrations brought major cases (the [[Northern Securities]] case 1904, Standard Oil 1911). ## The Enforcement Cycle The Sherman Act's 135-year history is a **cycle of enforcement and retreat**: | Era | Enforcement posture | Key actions | |-----|-------------------|-------------| | 1890–1901 | Weak / anti-labor | Used against unions more than trusts | | 1901–1920 | Progressive enforcement | Standard Oil breakup (1911), Clayton Act (1914) | | 1920s | Retreat under Republican administrations | Mellon-era permissiveness | | 1933–1945 | Aggressive (Thurman Arnold) | 150+ antitrust cases filed | | 1945–1975 | Moderate bipartisan enforcement | AT&T consent decree, merger challenges | | 1975–2020 | [[Chicago School]] retreat | Bork's *Antitrust Paradox*, "consumer welfare" standard | | 2020–present | Contested revival ([[Lina Khan]] / then reversal) | FTC challenges to Big Tech mergers, then Trump deregulation | ## The Conservative Counter-Revolution The most consequential intellectual attack on antitrust enforcement came from the **Chicago School of economics** (housed at the University of Chicago — ironically, the university Rockefeller founded): - **[[Robert Bork]]'s *The Antitrust Paradox* (1978):** Argued that antitrust enforcement should concern itself only with "consumer welfare" (measured by prices), not with corporate power, market structure, or political influence. Under this standard, a monopoly that keeps prices low is legal regardless of how much power it concentrates. - **Richard Posner** and the Law and Economics movement: Provided the judicial philosophy that translated Bork's theory into court decisions - **The Reagan revolution:** Reagan's FTC and DOJ adopted the Bork framework, effectively ending most antitrust enforcement and permitting the wave of mergers and acquisitions that reconsolidated American industry in the 1980s–2000s The [[Powell Memo]] (1971) explicitly identified the courts and universities as targets for conservative institutional capture — and antitrust law was one of the areas most successfully transformed by that project. ## The Through-Line The Sherman Act's history maps perfectly onto the KB's central narrative: **Gilded Age** → monopoly power provokes democratic response → **Sherman Act (1890)** → [[Progressive Era]] enforcement → **Standard Oil breakup (1911)** → 1920s retreat under Mellon → [[New Deal]] re-enforcement → postwar consensus → **Powell Memo (1971)** → Chicago School revolution → Reagan deregulation → re-consolidation → **Big Tech monopoly debate** → DOGE as deregulation vehicle The question the Sherman Act raised — **should democratic government have the power to constrain private corporate power?** — is the question the entire KB is organized around. ## See Also - [[Standard Oil]] — The monopoly the Act was designed to address - [[John D. Rockefeller]] — The monopolist whose methods provoked the law - [[Standard Oil Breakup]] — The Act's most consequential enforcement action - [[Northern Securities]] — The first major enforcement of the Act against consolidated capital (1904) - [[Gilded Age Plutocracy]] — The era of monopoly power - [[Powell Memo]] — The blueprint to reverse antitrust enforcement - [[Jay Gould]] — The railroad manipulator whose methods also provoked the law