Ideology and Per Se Rules

In my last post I discussed a particular per se rule proposed by David Boaz. Now I'd like to step back and examine per se rules generally.

The term "per se" gets misused a lot, so I should explain what I mean. Although it is often used as a synonym for "precisely," per se actually means "as such." In antitrust, a "per se rule" is one that bans a particular activity "as such" - without inquiring into its actual effect. So for instance, price fixing is taken to be anti-competitive in all cases (anti-competitive often simply means "inefficient," not literally anti-competitive). If you prove price fixing, you've won the trial. In contrast, other activities are analyzed under the "rule of reason." Pro-competitive justifications will be heard. An example is "predatory pricing." Courts will not rule against a defendant merely because she lowered prices in the face of competition. The plaintiff must show an anti-competitive effect (it gets more complicated but that's the basic distinction).

The logic of per se rules is that, like stereotypes, they're a real time-saver. If price fixing is always anti-competitive, then it's simply a waste of time to worry about whether it has an anti-competitive effect in a particular case. In fact, we might worry that defendants will stir up enough mud to cloud the issue and confuse the jury. Even if that's not a problem, the direct and indirect costs of litigation justify a per se rule in some cases.

The obvious problem is that, like stereotypes, per se rules are often inaccurate. Over time, as law and economics has gotten more sophisticated, per se rules have given way to rule of reason analysis. This is because we have come to recognize that there are possible pro-competitive consequences where once we saw only anti-competitive ones. Once you realize that the per se rule is sometimes wrong, the problem gets a lot trickier. It becomes a tradeoff between false positives and false negatives, with various court costs thrown in.

So I'm not actually against per se rules (I don't have a per se rule against them). What I'm against is the inappropriate deployment of them. The problem is that lots of ideologues seem to be addicted to them. As David Boaz writes:

One of the values of a political philosophy–sometimes dismissed as “ideology” or “dogma”–is that it gives us a rule, a set of principles, for deciding such questions. We don’t have the time to look at all the data and decide what we think about every issue, and we’re certainly all subject to personal biases on the issues that touch us.

[me again] Very well, but the pro-market assumption is precisely the sort that gets us into trouble. If you want to adopt a rule that will lead to wrong results in lots of cases, you need an account of why those costs are outweighed by the benefits. In the absence of such an account, I'm inclined to think that the per se rule is being used to cut off a debate that ought to take place. I'm ready to dismiss as "ideology" a per se rule that often misleads us but doesn't seem to gain us anything beyond ease of application.