Despite its increased powers and more competent personnel – two reforms that the FTC's 1969 critics maintained were necessary – the agency's overall performance remains poor. Indeed, measured by the agency's impact on the economy, matters have deteriorated. Although performance has not changed, the scope of activities has: In the 1960s, the FTC attempted little; in the 1970s, it attempted much. This chapter considers what changes, if any, can improve performance. Section I considers the question of abolishing the agency, and Sections II and III consider those changes that would likely be unsuccessful and successful, respectively, in improving performance. Because higher-quality personnel have not improved matters, we concentrate on changes in the Commission's environment.

Abolition

In determining whether the FTC is worth sustaining, we must articulate the appropriate decision criterion. To justify an FTC, it is not enough that markets may fail, that consumers are sometimes subject to fraud, or that business managers occasionally fix prices or engage in other practices that harm consumers. Rather, we must consider whether the benefits of the agency exceed the costs, given the best institutional setting that we are likely to achieve in an imperfect world. Given its current set of weak constraints, the costs of the agency appear to exceed the benefits, with this book yet another in a long line of studies to find the FTC wanting. Before concluding that the agency should be eliminated, however, we must consider two elements.