THIRD CUTS-CIRC BIENNiaL CONFERENCE NO EFFICIENCY WITHOUT EQUITY

1. THIRD CUTS-CIRC BIENNiaL CONFERENCENO EFFICIENCY WITHOUT EQUITY Professor Eleanor Fox New York University School of Law New Delhi 18-19 Nov. 2013

2. Theme • In matters of markets, does society want efficiency? Or does it want equity? Does the pursuit of equity inevitably undermine efficiency, and can we/should we tolerate the trade-off? • Should we really forego a 10% increase in growth if the rich get 8% and the poor get 2%? • This was the debate that CUTS-CIRC hosted on the web in the summer of 2013 • These are the oft-posed questions, and they set us on a wrong path. Markets can give us both equity and efficiency. We need to set our minds on where equity and efficiency converge.

3. The Debate • The book launch of Growth and Equity in honor of Pradeep Mehta • Dr. C. Rangarajan: “Growth cannot be chased at the cost of equity” • The lunge of Jeffrey Zuckerman • “a very curious proposition” • The retort • We cannot live by efficiency alone • Stories from the Arab spring • “the turmoil felt by a great majority of the population that has seen for years some people getting ever richer and some getter ever impoverished” KhalifaTounakti

4. Bringing the debate to competition law and policy • But how to achieve social justice and equity? • Should antitrust say: not our problem? • The three positions • 1 Yes, it must • or we undermine efficiency, make everyone worse off • 2 No. The equity demands are compelling. • We must do what is fair and just, lest the efficiency principle perpetuate severe injustices • keeping the rich rich and the poor poor and unempowered • 3 We have been socialized by a conservative antitrust • to confuse powerful business interests with efficiency • Take back “efficiency”

5. The myth of what efficiency requires; the myth of what it requires in antitrust • The many faces of efficiency • The faces of efficiency for a poor developing society/economy that has systemically excluded masses • The idea of efficient inclusive development • The unknowability within a range of how to design competition law to achieve a more robust economy • U.S. assumptions/perspectives compared with EU • U.S. – the forgotten power of paths for the outsider

6. Pro-Poorer competition law5 principles • 1. It would reach the worst restraints • These are often by the state • 2. It would be friendly to enforcement and not require armies of experts; be simple • E.g. what is dominance? • 3. Every law has a leaning • U.S. leans towards – trust the market • Pro-poorer – lean towards inclusion, no fencing out • Cf emerging principles on loyalty rebates: no case unless the conduct excludes an equally efficient competitor • 4. Poor need low prices; protect discounting • 5. But – protect hard competition • No quarter for protectionism; adjust, adjust, adjust

7. The Vision • There is a large space in which efficiency and a vision of a more equitable world co-exist • Especially in poorer developing countries with economies monopolized by elites, with large excluded masses from the economic enterprise • The country’s economy needs the energy and the talents of the people • The society and the economy are undermined by the entrenched exclusions • THERE IS NO EFFICIENCY WITHOUT EQUITY