Industrial Organization economists have long recognized the potential for anti-trust enforcement and other regulation, especially in the area of price, to help enforce or foster collusion.

From the Dec. 20, 1905 NYT, after the Interstate Commerce Commission Act of 1887 and the Sherman Antitrust Act of 1890, but before a laundry-list of illegal acts was enumerated in the Clayton Act of 1914, is a story concerning so-called "rebating," or what we economists call price discrimination, on railroads:

CHICAGO - Executive officials of all Western railroads at a meeting here to-day entered into an agreement with a view to compelling a strict adherence to the provisions of the inter-State commerce laws. Every road bound itself to inform the Inter-State Commerce Commission of any illegal acts on the part of any road.

That's a wonderful formula for collusion in a "don't throw me in that brier patch" kind of way.

In an example of letting the inmates run the asylum, and yet more potential for collusion to take place, it was proposed to create yet another "committee" to investigate and root out any illegal behavior amongst the railroads. Was this a state or federal commmittee? Please.

In order to keep in close touch with the situation, it was agreed that the roads would appoint a committee to represent variuos Western freight associations and to canvass the situation from time to time and report violations of the law. It will be the duty of this committee to furnish evidence in the event of an investigation.

The railroads to the federal government: "don't call us, we'll call you."

The railroad men admit that

[i]t was the general opinion at the meeting that since the law had abrogated the penitentiary clause and substituted a fine against railroads violating the law, railroad men should no longer feel any delicacy in giving information regarding infractions of the law.

Becker suggested that monetary fines could be more efficient forms of punishment than jail time, but I read his main point being that putting productive individuals in jail imposed a dead weight loss on society that was inefficient.

Perhaps an extension of the monetary fine vs. jail time comparison (if it hasn't already been considered) would be that "friends don't like sending friends to jail" but don't mind if "friends have to pay a fine with other people's (shareholders) money." In other words, a group of individuals may turn a blind eye to enforcement if going to jail is more likely - this sounds like Congressmen and ethics complaints, "there will be no crime if the honorable gentleman must do time."

But I digress, Becker did suggest that the greater the odds of detection/conviction the lower the incidence of criminal/illegal behavior, on the margin. These railroad executives seem to buy into this logic. If jail-time is off the table, railroad men are more likely to rat their neighbors out, which, in turn, should reduce criminal behavior (in this case price discrimination). The reward to society for such noble enforcement efforts? Likely, higher prices.

All of this stemming from the practice of price discrimination which, while not universally welfare enhancing, is far from unambiguosly welfare reducing.