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Regulatory economics and its discontents: some theoretical and historical observations

Michael A. Bernstein (Professor of History and Associated Faculty‐Member in Economics at the University of California, San Diego (UCSD), USA. He has held faculty appointments at Cambridge University, Mills College, and Princeton University, and he served briefly as a Staff Economist in the US Department of Energy in Washington, DC. His research and teaching interests focus on the economic and political history of the USA, macroeconomic theory, industrial organization economics, and the history of economic theory. Along with numerous articles and anthology chapters, Bernstein has published four volumes: The Great Depression: Delayed Recovery and Economic Change in America, 1929‐1939 (Cambridge University Press, 1987); Understanding American Economic Decline (co‐edited with David Adler) (Cambridge University Press, 1994); The Cold War and Expert Knowledge: New Essays on the History of the National Security State (co‐edited with Allen Hunter) (a special issue of the Radical History Review 63 (Fall, 1995); and A Perilous Progress: Economists and Public Purpose in Twentieth Century America (Princeton University Press, 2001).)

info

ISSN: 1463-6697

Article publication date: 20 March 2007

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Abstract

Purpose

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The purpose of this paper is to demonstrate that the impulse to dismantle the US regulatory apparatus in major industries, including telecommunications, had less to do with genuine advances in economic analysis and the formulation of public policy than with the pursuit of particular political and professional agendas.

Design/methodology/approach

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Through the perusal of archival evidence and narrative information gleaned from newspapers, official chronicles, and secondary historical literature, the research propositions of the paper are developed and argued.

Findings

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The rise and fall of regulatory economics in the US was the result of the historical evolution of both mainstream economic theory and of the economics profession during the twentieth century. With the coming of the Great Depression and the Second World War and during a large part of the Cold War era that followed, American economists embraced the idea that genuine welfare gains could be won from the direct regulation of markets in certain key industries. By the late 1960s, however, a combination of shocks to the economy and the further elaboration of research paradigms in the economics profession served to undercut what had been a virtual consensus in the field. Within two decades, a wholesale deregulation of the American economy was well underway.

Originality/value

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This paper situates the phenomenon of deregulation in the US case within a defined set of historical processes that involved political change in the twentieth century and the continued evolution of the professional community of economists nationwide and worldwide.

Keywords

Citation

Bernstein, M.A. (2007), "Regulatory economics and its discontents: some theoretical and historical observations", info, Vol. 9 No. 2/3, pp. 29-44. https://doi.org/10.1108/14636690710734634

Publisher

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Emerald Group Publishing Limited

Copyright © 2007, Emerald Group Publishing Limited

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