Deregulation
Economic regulations were promoted during the Gilded Age, in which progressive reforms were claimed as necessary to limit externalities like corporate abuse, unsafe child labor, monopolization, and pollution, and to mitigate boom and bust cycles.
The stated rationale for deregulation is often that fewer and simpler regulations will lead to raised levels of competitiveness, therefore higher productivity, more efficiency and lower prices overall.
Regulatory reform refers to organized and ongoing programs to review regulations with a view to minimizing, simplifying, and making them more cost effective.
In December 2001, Paul Krugman compared Enron with Argentina, claiming that both were experiencing economic collapse due to excessive deregulation.
In the mid-90s John Howard's Liberal Party began deregulation of the labor market with the Workplace Relations Act 1996, going much further in 2005 through its WorkChoices policy.
After Dilma's impeachment, Michel Temer introduced a labor reform, besides allowing up to 100% of foreign capital on Brazilian air companies[4] and giving more protection to state-owned enterprises from political pressure.
Ontario began deregulation of electricity supply in 2002, but pulled back temporarily due to voter and consumer backlash at the resulting price volatility.
The current status is a partially regulated structure in which consumers have received a capped price for a portion of the publicly owned generation.
Specific policies included: floating the exchange rate; establishing an independent reserve bank; performance contracts for senior civil servants; public sector finance reform based on accrual accounting; tax neutrality; subsidy-free agriculture; and industry-neutral competition regulation.
However, critics charge that the deregulation has brought little benefit to some sections of society, and has caused much of New Zealand's economy (including almost all of the banks) to become foreign-owned.
[citation needed] Russia went through wide-ranging deregulation (and concomitant privatization) efforts in the late 1990s under Boris Yeltsin, now partially reversed under Vladimir Putin.
[citation needed] Deregulation of the natural gas sector (Gazprom) is one of the more frequent demands placed upon Russia by the United States and European Union.
[citation needed] The Conservative government led by Margaret Thatcher started a programme of deregulation and privatization after the party's victory at the 1979 general election.
[22] During the Progressive Era (1890s–1920), Presidents Theodore Roosevelt, William Howard Taft, and Woodrow Wilson instituted regulation on parts of the American economy, most notably big business and industry.
[citation needed] During the Presidencies of Warren Harding (1921–23) and Calvin Coolidge (1923–29), the federal government generally pursued laissez-faire economic policies.
[23] In supporting his competition-limiting regulatory initiatives President Roosevelt blamed the excesses of big business for causing an economic bubble.
However, historians lack consensus in describing the causal relationship between various events and the role of government economic policy in causing or ameliorating the Depression.
[citation needed] Deregulation gained momentum in the 1970s, influenced by research by the Chicago school of economics and the theories of George Stigler, Alfred E. Kahn,[24] and others.
Cornell economist Alfred E. Kahn played a central role in both theorizing and participating in the Carter Administration's efforts to deregulate transportation.
[24][26] The first comprehensive proposal to deregulate a major industry, transportation, originated in the Richard Nixon Administration and was forwarded to Congress in late 1971.
[citation needed] President Jimmy Carter – aided by economic adviser Alfred E. Kahn[24] – devoted substantial effort to transportation deregulation, and worked with Congressional and civil society leaders to pass the Airline Deregulation Act on October 24, 1978 – the first federal government regulatory regime, since the 1930s, to be completely dismantled.
These were the major deregulation acts in transportation that set the general conceptual and legislative framework, which replaced the regulatory systems put in place between the 1880s and the 1930s.
These acts were less thoroughgoing than the legislation dealing with U.S. domestic transportation, in that they left in place the "conference" system in international ocean liner shipping, which historically embodied cartel mechanisms.
According to the United States Federal Maritime Commission, in an assessment in 2001, this appears to have opened up substantial competitive activity in ocean shipping, with beneficial economic results.
[34] As of April 2014, 16 U.S. states (Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Montana, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, and Texas) and the District of Columbia have introduced deregulated electricity markets to consumers in some capacity.
[citation needed] The movement toward greater reliance on market forces has been closely related to the growth of economic and institutional globalization between about 1950 and 2010.
Classical economist Adam Smith argued the benefits of deregulation in his 1776 work, The Wealth of Nations:[Without trade restrictions] the obvious and simple system of natural liberty establishes itself of its own accord.
[48] Much as the state plays an important role through issues such as property rights, appropriate regulation is argued by some to be "crucial to realise the benefits of service liberalisation".
"[49] William K. Black says that inappropriate deregulation helped create a criminogenic environment in the savings and loan industry, which attracted opportunistic control frauds like Charles Keating, whose massive political campaign contributions were used successfully to further remove regulatory oversight.
[50] By contrast, between 2007 and 2010, the OCC and OTS combined made zero criminal referrals; Black concluded that elite financial fraud has effectively been decriminalized.
