The Public Interest

What Deregulation Means

R. Shep Melnick

Spring 1986

FEW AREAS OF PUBLIC POLICY have received as much scholarly attention as regulation. For years economists and political scientists, historians and lawyers have dissected the origins, procedures, consequences, and, above all, inadequacies of public regulation of business firms. It is thus remarkable that two recent additions to this immense literature should add so much to our understanding of the subject. Martha Derthick and Paul Quirk offer a sophisticated yet clear and concise analysis of one of the most important developments of the past decade—the deregulation of the airline, trucking, and telecommunications industries. Thomas McGraw reviews more than one hundred years of regulatory history in his assessment of the policy contributions of Charles Frances Adams, Louis Brandeis, James Landis, and Alfred Kahn. At first glance it would appear that the only overlap between these two books is their discussion of Kahn, a key player in the deregulation drama and one of McGraw’s four “prophets.” Closer examination, though, reveals a more significant agreement: the pivotal role attributed to both economic theories and political entrepreneurs in the development of regulatory policies.  Read together, these books open up avenues of analysis of regulatory policy extending beyond the “economic theory of regulation,” which, despite its obvious inadequacies, still dominates the field.

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