Competition for Antitrust: The National Civic Federation and the Founding of the FTC

Originally published in SSRN

The formation of the Federal Trade Commission, rather than providing a check on business interests, follows the pattern of regulatory capture. The National Civic Federation, a group with strong business interest ties, was crucial to ensuring this outcome at the commission’s founding.

Regulation by the state can benefit or harm any business in society. While the market provides for consumers rather than special interests, rationally acting interests will be incentivized to use political means to capture rents, particularly if public clamor for regulation exists. The formation of the Federal Trade Commission, rather than providing a check on business interests, follows the pattern of regulatory capture. The National Civic Federation, a group with strong business interest ties, was crucial to ensuring this outcome at the commission’s founding.

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