Reviewed by Geofrey T. Mills University of Northern Iowa
This book is a collection of five essays, plus the report of a rapporteur, stemming from a Conference on the History of Pub-lic Policy sponsored by the Harvard Business School in late 1980. It is an interesting exercise to review these essays, nearly a decade since they were written, because so much has changed in the patina and paraphernalia which surrounds government regulation. It appears that the heavily regulated, command economies of the second and third world have utterly lost the battle for the hearts and minds of their peoples. Everywhere we look, it seems, capitalism is being embraced, such that government regulation is not the issue it once was. I suspect this is a somewhat rosy view, and can, therefore, recommend this volume as required reading for everyone interested in regulatory issues. The five essays contained in this volume are written by historians and attempt to give us a historical perspective on an amazingly wide variety of issues covered by “regulation”. Their approach, as McCraw points out, is institutional, and they strive to place regulation into the broader context of organizational development and cultural change.
The initial essay, by McCraw, reopens the trust question and attempts to put recent developments on this issue into the broader context of anti-trust scholarship since 1912. In this effort, McCraw succeeds admirably, as his essay summarizes recent research, expands our horizons and defines new areas for research. A lot of his reasoning is based on new work in economics and the negative impact of regulation on economic efficiency and its anti-consumer bias. His conclusion, in the tradition of Robert Bork, Oliver Williamson and Al Chandler, is that regulation — in the Brandeis tradition — has been anti-competitive and anti-consumerist.
Morton Keller’s essay on the Pluralist State takes a com-parative look at regulation in the first three decades of the twen-tieth century. His comparisons are with Europe and the U.S. in the years immediately before 1900. This essay covers a lot of ground in a relatively few pages and the wonder is that Keller can do this so well. His conclusions, based on this transnational and long-term view, are that regulatory activities depend upon the peculiar economic characteristics of a society, technological advances, and general cultural change. He sees regulation as a sort of necessary evil to counter the “antisocial forces” inherent in modern industrial economies.
To those of us familiar with Ellis Hawley’s scholarship, his contribution to this book will come as no surprise. His essay is a case study of the period of Hooverian Associationalism, 1921-1930, using as his examples the movie, lumber and aviation industries. Certainly we are all aware that these industries are currently regulated to some great extent. Hawley’s evaluation of this period reveals that ideas and ideology played a larger role than previously appreciated in “shaping national regulatory policy”. This ideology comes mainly from the experience of World War I, and had not been a major component of previous American political culture. He concludes that a number of the procedures and mechanisms of the regulation developed under this ideology stayed after the ideas themselves had been discredited.
Samuel Hays penned an essay investigating political choice in the administration of the regulatory activity. Hays selects the following areas for his analysis: the politics of administration; the economic context of regulation; the regulators and their world; and the relationship between the public and public regulation. Given the disparate nature of these organizing principles, it’s difficult to derive any consistent conclusions, but Hays does make some key points. One is that before World War II regulation focused on producers, while after 1945 consumers became advocates of change. Secondly, technology became an actual context of regulatory choice. Finally, he makes a plea for more analysis of the ideological context of regulation. In this latter regard, this paper echoes the Hawley paper.
David Vogel contributes the final piece, an essay on the new social regulation and its place in history. By social regulation, he means the impact of corporate behavior on the environment and upon consumer behavior. He sees this as a “new wave” of regulatory activity and focuses mainly on the 1960-1980 period. This essay is primarily descriptive and chronological in nature, but comparative as well, bringing in Western Europe and Japan. He finds that, while environmental and consumer protection certainly exists in Japan and Europe, they are more well defined and “onerous” in the U.S. This essay is an excellent primer on the development of this new regulation and its impact in the major industrialized economies of the world.
Taken as a group these essays fulfill their stated purpose of placing regulation in historical perspective. However, they do much more as well. We learn from this volume not only of the historical perspective, but also of transnational differences, the impact of technology and culture and, most importantly, the influence of ideas and ideology. A fitting summary would seem to be the old adage of John Maynard Keynes that we all suffer under the influence of some academic scribbler of ages past. What would be really interesting is to read revisions of these same articles in the perspective of the past decade. For this effort, I urge Tom McCraw to quickly organize another conference on the same theme.
