Civilizational Antitrust and Market Structure Rebalancing A Life-Value-Oriented Reformulation of Industrial Organization Theory

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日期:2026/02/28 IAE

Civilizational Antitrust and Market Structure Rebalancing

A Life-Value-Oriented Reformulation of Industrial Organization Theory

Frank Chen
Civilizational Economic School (Charity Economicism)

Abstract

Contemporary antitrust doctrine remains anchored in static price theory and allocative efficiency. While effective in identifying consumer welfare distortions arising from market power, it systematically omits civilizational externalities—ecological degradation, intergenerational risk transfer, systemic fragility, and life-value erosion. This paper proposes a Civilizational Antitrust Model (CAM), integrating life-value-adjusted marginal cost into industrial organization theory. By formalizing a Life-Adjusted Pricing Condition (LAPC) and a Civilizational Antitrust Index (CAI), the framework extends monopoly and oligopoly equilibrium analysis to incorporate sustainability constraints and systemic risk. The model demonstrates that conventional equilibria structurally underprice long-run survival costs. We argue that competition policy must transition from allocative efficiency maximization to minimization of civilizational opportunity cost under sustainability thresholds. The paper concludes with doctrinal, institutional, and capital-market implications for global regulatory transformation.

I. Introduction: From Allocative Efficiency to Civilizational Survival

Modern competition law evolved from neoclassical price theory, where welfare is maximized when price equals marginal cost.¹ The prevailing consumer welfare standard interprets market power as harmful when it produces higher prices or reduced output.² However, this framework presumes that marginal cost fully reflects social cost—a presumption that collapses under ecological, systemic, and intergenerational realities.

Industrial activity today generates:

Climate externalities
Biodiversity collapse
Systemic financial fragility
Technological systemic risk
Intergenerational depletion

These risks accumulate outside price signals and beyond traditional merger screens.

This paper advances three central claims:

Traditional antitrust underestimates systemic harm by excluding civilizational cost components.
Market concentration can amplify long-term systemic fragility even when short-run prices fall.
Competition policy must incorporate survival-constrained optimization rather than static efficiency.

II. Literature Context

A. Antitrust and Welfare Foundations

The Chicago School emphasizes allocative efficiency and price discipline.³ Posner formalized antitrust as efficiency optimization.⁴

B. Market Failure and Externalities

Arrow identified market failure where social and private returns diverge.⁵
Stiglitz emphasized information asymmetries and systemic instability.⁶

C. Ecological Economics and Sustainability

Nordhaus integrated climate damages into macro models.⁷
Ecological economists argue that GDP growth detached from ecological constraints is unsustainable.⁸

However, no framework integrates ecological externalities directly into antitrust structure theory. This paper fills that gap.

III. Baseline Monopoly Model

Inverse demand:

$P(Q)=a-bQ$ $P (Q) = a - b Q$

Cost:

$C(Q)=cQ+\frac{d}{2}Q^2$ $C (Q) = c Q + 2 d Q^{2}$

Marginal cost:

$MC(Q)=c+dQ$ $MC (Q) = c + d Q$

Monopoly equilibrium:

$MR=MC$ $MR = MC$ $a-2bQ=c+dQ$ $a - 2 b Q = c + d Q$ $Q^M=\frac{a-c}{2b+d}$ $Q^{M} = 2 b + da - c$

Price:

$P^M=a-bQ^M$ $P^{M} = a - b Q^{M}$

This solution ignores ecological and civilizational losses.

IV. Civilizational Cost Architecture

We extend cost functions by adding two convex components:

A. Ecological Marginal Cost

$EC(Q)=\frac{e}{2}Q^2$ $EC (Q) = 2 e Q^{2}$ $MEC(Q)=eQ$ $MEC (Q) = e Q$

B. Life-Value Risk Cost

Let civilizational risk contribution be proportional to output:

$CR(Q)=\kappa Q$ $CR (Q) = κ Q$

Life-value loss:

$LV(Q)=\frac{v}{2}(\kappa Q)^2$ $L V (Q) = 2 v (κ Q)^{2}$ $MLV(Q)=v\kappa^2Q$ $M L V (Q) = v κ^{2} Q$

Total marginal cost:

$MSC(Q)=c+(d+e+v\kappa^2)Q$ $MSC (Q) = c + (d + e + v κ^{2}) Q$

V. Life-Adjusted Pricing Condition (LAPC)

Civilizational equilibrium requires:

$MR=MSC$ $MR = MSC$ $a-2bQ=c+(d+e+v\kappa^2)Q$ $a - 2 b Q = c + (d + e + v κ^{2}) Q$ $Q^C=\frac{a-c}{2b+d+e+v\kappa^2}$ $Q^{C} = 2 b + d + e + v κ ^{2} a - c$

Since:

$d+e+v\kappa^2>d$ $d + e + v κ^{2} > d$ $Q^C<Q^M$ $Q^{C} < Q^{M}$

Thus, civilizational pricing reduces output relative to monopoly equilibrium.

VI. Welfare Comparison

Standard welfare:

$W_M=CS+PS-EC$ $W_{M} = CS + PS - EC$

Civilizational welfare:

$W_C=CS+PS-EC-LV$ $W_{C} = CS + PS - EC - L V$

Because $LV$ $L V$ grows quadratically, conventional welfare overestimates optimal output in high-risk sectors.

VII. Oligopoly and Market Concentration

Under Cournot competition:

$Q_i=\frac{a-c}{b(n+1)}$ $Q_{i} = b ( n + 1 ) a - c$

Civilizational adjustment:

$Q_i^C=\frac{a-c}{b(n+1)+e+v\kappa^2}$ $Q_{iC} = b ( n + 1 ) + e + v κ ^{2} a - c$

As concentration rises, systemic vulnerability increases.

VIII. Civilizational Antitrust Index (CAI)

Traditional:

$HHI=\sum s_i^2$ $HH I = \sum s_{i 2}$

Civilizational extension:

$CAI=HHI(1+\phi CR)$ $C A I = HH I (1 + ϕCR)$

Merger trigger:

$CAI>CAI_{threshold}$ $C A I > C A I_{t h res h o l d}$

This embeds sustainability into structural evaluation.

IX. Dynamic Extension

Let ecological capital stock $N_t$ $N_{t}$ :

$N_{t+1}=N_t-rQ_t$ $N_{t + 1} = N_{t} - r Q_{t}$

Let civilizational risk accumulate:

$CR_{t+1}=CR_t+\alpha Q_t-\beta Innovation_t$ $C R_{t + 1} = C R_{t} + α Q_{t} - β I nn o v a t i o n_{t}$

If $Q_t=Q^M$ $Q_{t} = Q^{M}$ , risk grows faster than under $Q^C$ $Q^{C}$ .

Dynamic constraint:

$CR_t \leq 1$ $C R_{t} \leq 1$

Competition policy must ensure equilibrium remains within sustainable region.

X. Civilizational Opportunity Cost Minimization

Define:

$COC=Depletion+Damage+Intergenerational\ Loss$ $COC = De pl e t i o n + D ama g e + I n t er g e n er a t i o na l L oss$

Policy objective:

$\min COC \quad s.t.\quad CR\le1$ $min COC s . t . CR \leq 1$

This replaces static deadweight loss minimization.

XI. Capital Market Transmission

Let capital cost depend on systemic exposure:

$r_c=r+\theta CR$ $r_{c} = r + θCR$

High-risk concentration increases financing cost, inducing rebalancing.

XII. Institutional Implications

Merger review must include sustainability metrics.
High-risk industries require structural remedies.
Capital requirements should reflect civilizational exposure.
Border adjustments prevent ecological arbitrage.

XIII. Normative Framework

The doctrinal transformation:

$Max\ Allocative\ Efficiency \rightarrow Min\ Civilizational\ Risk$ $M a x A ll oc a t i v e E ff i c i e n cy \to M in C i v i l i z a t i o na l R i s k$

Antitrust becomes a long-run survival institution.

XIV. Conclusion

Traditional competition policy is insufficient under planetary constraints. Incorporating life-value and systemic risk into industrial organization theory enables a survival-consistent regulatory doctrine. The transition from efficiency-centric to civilization-centric antitrust represents a necessary institutional evolution.

Notes

Robert H. Bork, The Antitrust Paradox (New York: Basic Books, 1978).
Richard A. Posner, Antitrust Law, 2nd ed. (Chicago: University of Chicago Press, 2001).
Ibid.
Ibid.
Kenneth J. Arrow, “The Organization of Economic Activity,” 1969.
Joseph E. Stiglitz, “Markets, Market Failures, and Development,” 1989.
William D. Nordhaus, The Climate Casino, 2013.
Herman Daly, Steady-State Economics, 1977.

Bibliography

Arrow, Kenneth J. 1969. “The Organization of Economic Activity.”

Bork, Robert H. 1978. The Antitrust Paradox.

Daly, Herman. 1977. Steady-State Economics.

Nordhaus, William D. 2013. The Climate Casino.

Posner, Richard A. 2001. Antitrust Law.

Stiglitz, Joseph E. 1989. “Markets, Market Failures, and Development.”

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