Career
Stocking's first book was an empirical study of competition in the petroleum industry, in which he had worked as a "roughneck" in the oil fields of western Texas. While teaching at the University of Texas, Stocking had his first taste of public service as a member of the Consumer Advisory Board of the National Recovery Administration (NRA) in the mid-1930s, where he observed the destructive effects of the brief U.S. legalization of industrial cartels.
When the antitrust laws were reinstated after about 1937, Stocking served through the early 1940s as an economic adviser to the great head of the Antitrust Division of the Department of Justice, Thurman Arnold. It was Arnold who initiated for the first time a large number of successful U.S. criminal prosecutions of international cartels in the mid-1940s. Information from these prosecutions and from Congressional investigations of the nefarious roles played by cartels in facilitating the economic policies of national socialism formed the basis of Stocking's two landmark books on international price-fixing cartels.
In the 1950s, Stocking was involved in several issues that had lasting effects on antitrust enforcement. Perhaps Stocking's best-known journal article was a 1955 article in the American Economic Review that addressed what is now known as the "Cellophane Paradox." In research on the DuPont company arising from his student's (Willard F. Mueller) Ph. D. dissertation, Stocking and Mueller pointed out the error of mistaking a monopolist's inability to exercise market power by raising price above the current price for an inability to have already exercised market power by raising price significantly above the competitive price. Courts that use a monopolized product's elevated market price will typically misconstrue a completed anticompetitive act as a lack of market power. A second issue addressed by Stocking was the extent to which concepts of "workable competition" and the "rule of reason" should be employed in antitrust enforcement.
Read more about this topic: George W. Stocking, Sr.
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