Reagan Appoints William Baxter as Antitrust Chief, Enforcement Collapses as Chicago School Takes Control

President Ronald Reagan appointed Stanford Law Professor William F. Baxter as Assistant Attorney General for the Antitrust Division, marking the formal beginning of antitrust enforcement collapse and the operationalization of Chicago School ideology throughout the federal government. Baxter, a committed Chicago School adherent who believed most antitrust enforcement harmed consumers, would serve until 1983 and fundamentally transform merger policy through the revolutionary 1982 Merger Guidelines. During Baxter’s tenure and the broader Reagan years (1981-1989), DOJ antitrust enforcement plummeted: civil cases fell from approximately 100 per year in the early 1980s to just above 25 by the decade’s end. More significantly, the nature of enforcement changed—cases against Fortune 500 companies dropped from an average of 21 per year (1955-1979) to just 6 per year after 1980. Baxter dismissed the longstanding IBM antitrust case and paradoxically both engineered the AT&T breakup (already in progress) while simultaneously establishing guidelines that would prevent similar structural remedies for decades. He declared ’there is no such thing as a vertical merger problem,’ effectively repealing through administrative fiat the Celler-Kefauver Act’s prohibition on anticompetitive vertical mergers—a congressional statute—without requiring a single vote. Budget reductions hampered hiring of antitrust attorneys; the Division did not hire new attorneys in 1984, 1986, and 1987. Senator Howard Metzenbaum called Baxter’s 1983 resignation ‘an early Christmas present’ for antitrust believers, criticizing his ‘stubborn insistence that large corporations are seemingly incapable of wrongdoing.’ Business lobbyists praised Baxter’s ‘policy of benign neglect’ as ’the finest’ antitrust leadership ever.