Free enterprise is at the core of the American experiment. As President Calvin Coolidge famously proclaimed in 1925, “The chief business of the American people is business.”
Yet in the early days of the American Republic, it was not clear that competition as we understand it today was even legal. Corporate law, such as it was, primarily contemplated state-granted charters of monopoly for infrastructural projects, such as canals and turnpikes. These charters could be enforced against new entrants in a field.
In the British common law system that the United States inherited, competition could be policed through tort liability — the legal system by which those harmed by the actions of another person or entity can be compensated — even when a state-granted monopoly did not exist. There was legal precedent, for example, allowing merchants in a particular area to sue competitors who had recently entered the same geographic location.
