Adam Smith, Collusion and 'Right' at the Supreme Court

Abstract

Adam Smith acquired yet another fifteen minutes of fame when his views on collusion were injected into the Supreme Court's ruling in Bell Atlantic v. Twombly. We consider Smith's views on the small group solidarity. Motivation by a desire for approbation provides Smith's explanation for the existence of well-functioning groups. The question, however, is what happens when the groups are in conflict. Smith's answer, supposing that groups constrain themselves by considerations of justice, was to side with the larger group. In this supposition and conclusion, Smith was followed by utilitarians in the classical period.

Keywords: Adam Smith, Supreme Court, monopoly, approbation

JEL Classification: B12, B31, K21, L12