Competition policy, sustainability, and inclusive wealth

Abstract

The recent regulatory shift by competition and antitrust authorities—permitting limited industry collaboration on sustainability-related investments to better align markets with broader environmental and social objectives—signals a reconsideration of competition as a mechanism for advancing collective welfare. Drawing on Adam Smith’s Wealth of Nations and Theory of Moral Sentiments, this paper traces this evolution from a historical perspective and situates it within the established literature on sustainable development—most notably the principles of intergenerational justice and inclusive wealth. Collectively, these insights provide a framework for understanding how competition policy can be employed to assess and evaluate trade-offs inherent in societies’ broader welfare functions, including considerations of negative externalities and natural capital.