Monday, September 23, 2013

Histories of deregulation

Dan Farber has posted a review of Thomas McGarity's Freedom to Harm: The Lasting Legacy of the Laissez Faire Revival (Yale UP, 2013), and has a more optimistic take on recent US regulatory history than McGarity does. According to the book's website, it
tells the story of how the business community, and the trade associations and think tanks that it created, launched three powerful assaults during the last quarter of the twentieth century on the federal regulatory system and the state civil justice system to accomplish a revival of the laissez faire political economy that dominated Gilded Age America.  Although the consequences of these assaults became painfully apparent in a confluence of crises during the early twenty-first century, the patch-and-repair fixes that Congress and the Obama administration put into place did little to change the underlying laissez faire ideology and practice that continues to dominate the American political economy.  In anticipation of the next confluence of crises, Thomas McGarity offers suggestions for more comprehensive governmental protections for consumers, workers, and the environment.
Farber, on the other hand, thinks opponents of regulation have been less successful than in the picture McGarity paints:
Using the evidence Tom McGarity assembles in his recent book 'Freedom to Harm', this paper examines regulatory history during the thirty-plus years since Reagan became president. Although the available evidence presented is necessarily incomplete, it suggests strongly that the opponents of regulation have had only mixed success. Legislative efforts to roll back the regulatory state have given rise to pitched political battles, but in the end have not infrequently ended in modest expansions of agency authority. Opponents of regulation have had more luck in the rule-making process, where they have succeeded in delaying or killing regulatory efforts or in weakening the final regulations. They have successfully joined advocates of “smarter regulation” in some of these efforts. Yet, in the end, the body of federal regulation has continued to grow almost unabated. The biggest success of the opponents of regulation has come through budget cuts and policy changes that have weakened enforcement, but even there, other factors may have helped soften the impact on the beneficiaries of regulation. Altogether, despite the frustrations of environmentalists, this has also been a dismal period for opponents of the regulatory state.

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