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We test a simple bakery price-fixing pact and watch it unravel, then use that failure to explain how transaction costs shape institutions, from unenforceable contracts to the rise of the corporate trust. We connect the common law doctrine of restraint of trade to the Sherman Act, modern merger fights, and a real-world egg pricing controversy where evidence is hard to untangle from supply shocks.
• a two-baker cartel that collapses as soon as cheating pays
• why courts historically refuse to enforce restraint of trade agreements
• how the trust device unifies control and removes the need to “trust” rivals
• how the Sherman Antitrust Act targets trusts and criminalizes collusion
• why merger discretion creates power and invites rent seeking
• why high prices and parallel pricing are not proof of conspiracy
• how price indexes can reduce transaction costs and also enable coordination
• two antitrust “twedges” that poke at efficiency arguments
• a listener letter on lateness norms and why uncertainty matters
If any listeners have some ideas about it, please do write in.

Links:

• Egg producers settle
• Bartholomae, T.C. (1923). “The Common Law on Restraint of Trade.” University Journal of Business, 1(4), 451–466.
• Munger, M.C. (2021). “Giants among us: do we need a new antitrust paradigm?” Constitutional Political Economy. https://doi.org/10.1007/s10602-021-09350-w
• Sherman Antitrust Act (1890)
• William Baxter Joke
• Robert Bork, Antitrust Paradox

You can follow Mike Munger on Twitter at @mungowitz