Introduction to Harberger’s Monopoly and Resource Allocation–The Pioneering Article on Deadweight Loss and Empirical Measurement of the Social Costs of Monopoly

By Hill Wellford

Arnold Harberger´s 1954 article, Monopoly and Resource Allocation, is still relevant today in the 2020’s; in fact, with increasingly loud calls for more “aggressive” (or excessive?) antitrust enforcement, it may be as relevant now as the day it was written. The article brought empirical analysis of the social costs of monopoly into the mainstream of antitrust work. Harberger´s 1954 article broke with the then-current economic orthodoxy and set monopoly research on a path that would lead to a strong shift toward empiricism and the development of a more cautious approach for antitrust enforcement. The article is famous for bringing monopoly deadweight loss analysis into the mainstream.