Information Exchange among Firms: The Coherence of Justice Brandeis' Regulated Competition Approach

During the 1920s, two different proposals of a regulated competition competed in the US. The first, inspired by trade associations, was advocated by Herbert Hoover. This approach echoes a managerialist view of a coordinated competition under state support. The second – promoted by Louis Brandeis – provides an alternative view of what a regulated competition should be: avoiding a ruinous competition through information exchange among small firms. From his involvement in the Wilson's campaign team in 1912, to his dissent in the American Colum ruling of the US Supreme Court in 1923 and his position against the National Industrial Recovery Act in Schechter Poultry in 1935, we argue that Louis Brandeis was constant in his opposition to such a convergence between Big Business and Big Government. His intemporal coherence relies in his Jeffersonian approach advocating for a dispersion of economic powers for both efficiency and political purposes. At the opposite, both the trade associations' movement and the NIRA experience pertain to an Alexander Hamilton's perspective that is based on an equilibrium between the economic gains resulting from concentration or coordination and a strong political control.