¹ Even public utility regulation raises definitional issues. See McKie, James W., “Regulation and the Free Market: The Problem of Boundaries,” Bell Journal of Economics and Management Science, I (Spring, 1970), 6–26CrossRefGoogle Scholar.

² On the “public interest” in American utility law, see Scheiber, Harry N., “The Road to Munn: Eminent Domain and the Concept of Public Purpose in the State Courts,” Perspectives in American History, V (1971), 327–402Google Scholar. Nebbia v. New York, 291 U.S. 502 (1934). Most textbooks of public utility economics provide a summary of the evolution of “public interest” law; an example is Part I of Garfield, Paul J. and Lovejoy, Wallace F., Public Utility Economics (Englewood Cliffs, N.J., 1964Google Scholar).

³ The concept is examined at length in Schubert, Glendon, The Public Interest (Glencoe, Ill., 1960Google Scholar); Flathman, Richard E., The Public Interest: An Essay Concerning the Normative Discourse of Politics (New York, 1966Google Scholar); Friedrich, Carl J., ed., The Public Interest (Nomos V, New York, 1962Google Scholar); and Held, Virginia, The Public Interest and Individual Interests (New York, 1970Google Scholar).

⁴ Massachusetts Acts and Resolves, 1869, Chapter 408, Section 4, p. 701; Adams, Charles Francis Jr., “Boston, I,” North American Review, CVI (January, 1868), 18, 25Google Scholar; Adams, , “Railroad Inflation,” North American Review, CVIII (January, 1869), 158, 163–164Google Scholar.

⁵ A typical declaration of the principle came from Commissioner Joseph B. Eastman of the ICC, who wrote to his colleagues in 1931: “For a long time I have quarreled with the idea that in a complaint case involving freight rates this Commission is merely a jury to decide between the parties upon the basis of the particular facts which they happen to bring to our attention in that case. The Commission is much more than that; it is an expert tribunal with a definite responsibility for the railroad rate structure of the country and its proper adjustment in the general public interest.” ICC Docket No. 22876, May 4, 1931, Eastman Papers, Robert Frost Library, Amherst College, Amherst, Massachusetts.

⁶ Landis, , The Administrative Process (New Haven, Conn., 1938Google Scholar). On the “public interest,” see especially 51-52.

⁷ Davis, G. Cullom, “The Transformation of the Federal Trade Commission, 1914-1929,” Mississippi Valley Historical Review, XLIX (December, 1962), 452Google Scholar ff.

⁸ The Humphrey episode is examined in Leuchtenburg, William E., “The Case of the Contentious Commissioner: Humphrey's Executor v. U.S.,” in Hyman, Harold M. and Levy, Leonard W., eds., Freedom and Reform: Essays in Honor of Henry Steele Commager (New York, 1967), 276–312Google Scholar. The focus of Landis's attention is evident in The Administrative Process, 4.

⁹ Huntington, , “The Marasmus of the ICC: The Commission, the Railroads, and the Public Interest,” Yale Law Journal, LXI (April, 1952), 467–509CrossRefGoogle Scholar; Jaffe, , “The Effective Limits of the Administrative Process: A Reevaluation,” Harvard Law Review, LXVII (May, 1954), 1105–1135CrossRefGoogle Scholar; Bernstein, , Regulating Business by Independent Commission (Princeton, N.J., 1955CrossRefGoogle Scholar); Landis, Report on Regulatory Agencies to the President-Elect (U.S., Senate, Committee on the Judiciary, 86th Cong., 2d sess., 1960).

¹⁰ Cox, Edward F. et al. , , “The Nader Report” on the Federal Trade Commission (New York, 1969Google Scholar); Fellmeth, Robert, The Interstate Commerce Omission (New York, 1970Google Scholar); Green, Mark J., The Closed Enterprise System (New York, 1972Google Scholar); Green, , ed., The Monopoly Makers (New York, 1973Google Scholar). Examples of additional critical literature include Kohlmeier, Louis M. Jr., The Regulators: Watchdog Agencies and the Public Interest (New York, 1969Google Scholar); and MacAvoy, Paul W., ed., The Crisis of the Regulatory Commissions (New York, 1970Google Scholar). The quotation is from Heilbroner, et al. , , In the Name of Profit (Garden City, N.Y., 1972), 239Google Scholar.

¹¹ Kolko, , Railroads and Regulation 1877-1916 (Princeton, N.J., 1965), 3, 233CrossRefGoogle Scholar; Kolko, , The Triumph of Conservatism: A Reinterpretation of American History, 1900-1916 (New York, 1963), 59Google Scholar.

¹² A collection of Kolko criticism appears in Graham, Otis L. Jr., ed., From Roosevelt to Roosevelt: American Politics and Diplomacy, 1901-1941 (New York, 1971), 70–109Google Scholar; see also Harbeson, Robert U., “Railroads and Regulation, 1877-1916, Conspiracy or Public Interest?” Journal of Economic History, XXVII (June, 1967), 230–242CrossRefGoogle Scholar.

¹³ Membership in the “Chicago school” is not a hard and fast category, but one important member is George J. Stigler (see note 33 below). Other Chicago-associated scholars apparently influenced by Kolko include Moore, Thomas G., Freight Transportation Regulation: Surface Freight and the Interstate Commerce Commission (Washington, D.C., 1972Google Scholar); and Hilton, George W., “The Consistency of the Interstate Commerce Act,” Journal of Law and Economics, IX (October, 1966), 87CrossRefGoogle Scholar ff.

¹⁴ This point is discussed briefly in Wilson, James Q., “The Dead Hand of Regulation,” The Public Interest, XXV (Fall, 1971), 46–49Google Scholar; on the FPC, see MacAvoy, Paul W., “The Regulation-Induced Shortage of Natural Gas,” Journal of Law and Economics, XIV (April, 1971), 167–199Google Scholar.

¹⁵ Benson, , Merchants, Farmers, and Railroads: Railroad Regulation and New York Politics, 1850-1887 (Cambridge, Mass., 1955), 212, 245CrossRefGoogle Scholar. An earlier work that included substantial analysis of nineteenth century state commissions in one area was Kirkland, Edward Chase, Men Cities and Transportation: A Study in New England History, 1820-1900 (2 vols., Cambridge, Mass., 1948Google Scholar). Benson's conclusion that railroad men supported regulation somewhat reluctantly was consistent with an earlier report by Cochran, Thomas C., in Railroad Leaders 1845-1890: The Business Mind in Action (Cambridge, Mass., 1953), 189–199Google Scholar.

¹⁶ Nash, , “Origins of the Interstate Commerce Act of 1887,” Pennsylvania History, XXIV (July, 1957), 181–190Google Scholar; Purcell, , “Ideas and Interests: Businessmen and the Interstate Commerce Act,” Journal of American History, LIV (December, 1967), 561–578CrossRefGoogle Scholar; Kerr, , American Railroad Politics, 1914-1920 (Pittsburgh, 1968Google Scholar).

¹⁷ Martin, , Enterprise Denied: Origins of the Decline of American Railroads, 1897-1917 (New York, 1971Google Scholar). Martin concluded that the ICC's regulatory action in the decade following passage of the Hepburn Act (1906) induced a capital starvation that precipitated the secular decline of American railroads. The fallacy here was Martin's insufficient emphasis on a much stronger factor in the railroads' eclipse — the onset of severe intermodal competition, both for freight, from trucks, and for passengers, from interurban electrics, automobiles, and airlines.

¹⁸ Martin, Enterprise Denied, passim; Martin, , “The Troubled Subject of Railroad Regulation in the Gilded Age — A Reappraisal,” Journal of American History, LXI (September, 1974), 339–371CrossRefGoogle Scholar.

¹⁹ Miller, , Railroads and the Granger Laws (Madison, Wis., 1971Google Scholar); Caine, , The Myth of a Progressive Reform: Railroad Regulation in Wisconsin 1903-1910 (Madison, Wis., 1970Google Scholar).

²⁰ Miller, Railroads and the Granger Laws, ix.

²¹ The litigation over the Granger laws produced one of the landmark cases in public utility law, Munn v. Illinois [94 U.S. 113 (1877)], in which the opinion of Chief Justice Morrison R. Waite explicitly relied on the “public interest” doctrine in affirming the power of states to regulate enterprises that “stand in the very ‘gateway of commerce’ and take toll from all who pass.” Miller's book provided an insightful new perspective on this decision, tying it to earlier state policies, as did Harry N. Scheiber in the article cited in note 2 above.

²² Caine, The Myth of a Progressive Reform, especially Chapter 10. Caine's analysis was strongest in clarifying the motives of La Follette and other principals, the legislative trade-offs that usually characterize regulatory statute-making, and the policies of the new commission itself. Nowhere, however, did he show that rates in Wisconsin were too high, or that a substantial general decrease would have benefited the shippers or the public without unduly injuring the corporations. Instead he seemed to take this difficult question for granted.

²³ Davis, , “The Transformation of the Federal Trade Commission, 1914-1929,” Mississippi Valley Historical Review, XLIX (December, 1962), 437–455CrossRefGoogle Scholar.

²⁴ Parrish, , Securities Regulation and the New Deal (New Haven, Conn., 1970), 219, 232Google Scholar. This book covered much of the same ground as De Bedts, Ralph F., The New Deal's SEC: The Formative Years (New York, 1964Google Scholar), but was better researched and more analytical.

²⁵ Coase, Ronald H., “Comment,” American Economic Review, LIV (May, 1964), 194Google Scholar. The rapid rise of interest in regulation among economists may be traced through two relatively new journals, both devoted largely to regulatory topics: the Journal of Law and Economics, and the Bell Journal of Economics and Management Science. A third indication is the large project begun in the late 1960s by the Brookings Institution, which resulted in a number of books on regulation, many of which are cited below.

²⁶ The quotation is from Meyer, John R. and Morton, Alexander L., “A Better Way to Run the Railroads,” Harvard Business Review, LII (July-August, 1974), 143Google Scholar, citing an unpublished paper by Thomas G. Moore. Moore's views are elaborated also in a book that conveniently surveys the literature of its subject: Freight Transportation Regulation: Surface Freight and the Interstate Commerce Commission (Washington, D.C., 1972Google Scholar). Important studies include Meyer, John R., Peck, Merton J., Stenason, John, and Zwick, Charles, The Economics of Competition in the Transportation Industries (Cambridge, Mass., 1959Google Scholar); Friedlaender, Ann F., The Dilemma of Freight Transport Regulation (Washington, D.C., 1969Google Scholar); Wilson, George, Essays on Some Unsettled Questions in the Economics of Transportation (Bloomington, Ind., 1962Google Scholar); Wilson, , “The Effect of Rate Regulation on Resource Allocation in Transportation,” American Economic Review, LIV (May, 1964), 160–171Google Scholar; and Farmer, Richard N., “The Case for Unregulated Truck Transportation,” Journal of Farm Economics, XLVI (May, 1964), 398–409CrossRefGoogle Scholar. An interesting attempt to apply theory to early railroad experience is MacAvoy, Paul W., The Economic Effects of Regulation: The Trunk-Line Railroad Cartels and the Interstate Commerce Commission Before 1900 (Cambridge, Mass., 1965Google Scholar).

²⁷ Caves, Richard E., Air Transport and Its Regulators — An Industry Study (Cambridge, Mass., 1962Google Scholar); Jordan, William A., Airline Regulation in America: Effects and Imperfections (Baltimore, 1970Google Scholar); Eads, George C., The Local Service Air Line Experiment (Washington, D.C., 1972Google Scholar); Keeler, Theodore, “Airline Regulation and Market Performance,” Bell Journal of Economics and Management Science, III (Autumn, 1972), 399–424CrossRefGoogle Scholar; Douglas, George W. and Miller, James C. III, Economic Regulation of Domestic Air Transport: Theory and Policy (Washington, D.C., 1974Google Scholar).

²⁵ MacAvoy, Paul W., Price Formation in Natural Gas Fields (New Haven, Conn., 1962Google Scholar); MacAvoy, , “The Effectiveness of the Federal Power Commission,” Bell Journal of Economics and Management Science, I (Autumn, 1970), 271–303CrossRefGoogle Scholar; MacAvoy, , “The Regulation-Induced Shortage of Natural Gas,” Journal of Law and Economics, XIV (April, 1971), 167–199Google Scholar.

²⁹ Stigler, George J. and Friedland, Claire, “What Can Regulators Regulate? The Case of Electricity,” Journal of Law and Economics, V (October, 1962), 1–16CrossRefGoogle Scholar; see also Demsetz, Harold, “Why Regulate Utilities?” Journal of Law and Economics, XI (April, 1968), 55–65CrossRefGoogle Scholar. An enlightening discussion of the evolution of utility pricing theories is Coase, R. H., “The Theory of Public Utility Pricing and Its Application,” Bell Journal of Economics and Management Science, I (Spring, 1970), 113–128CrossRefGoogle Scholar. Elaborations of this theme may be found in any of several standard textbooks on public utility economics, one of the best of which is Kahn, Alfred E., The Economics of Regulation (2 vols., New York, 1970, 1971Google Scholar).

³⁰ Averch, Harvey and Johnson, L. L., “Behavior of the Firm Under Regulatory Constraint,” American Economic Review, LII (December, 1962), 1053–1069Google Scholar; discussions of the “A-J effect” are summarized in Baumol, William J. and Klevorick, Alvin K., “Input Choices and Rate-of-Return Regulation: An Overview of the Discussion,” Bell Journal of Economics and Management Science, I (Autumn, 1970), 162–190CrossRefGoogle Scholar.

³¹ The following are examples of recent scholarship on these topics: on the FCC, Noll, Roger G., Peck, Merton J., and McGowan, John J., Economic Aspects of Television Regulation (Washington, D.C., 1973Google Scholar); Coase, R. H., “The Federal Communications Commission,” Journal of Law and Economics, II (October, 1959), 1–40CrossRefGoogle Scholar; on technological aspects, Capron, William M., ed., Technological Change in Regulated Industries (Washington, D.C., 1971Google Scholar); on one aspect of SEC regulation, Jaffe, Jeffrey F., “The Effect of Regulation Changes on insider Trading,” Bell journal of Economics and Management Science, V (Spring, 1974), 93–121CrossRefGoogle Scholar; on state insurance commissions, Joskow, Paul L., “Cartels, Competition and Regulation in the Property-Liability Insurance Industry,” Bell Journal of Economics and Management Science, IV (Autumn, 1973), 375–427CrossRefGoogle Scholar.

³² Many of the institutionalists did approach problems in this way, as have a few more recent economists such as J. K. Galbraith. For the historians, see, in particular, Hawley, , The New Deal and the Problem of Monopoly: A Study in Economic Ambivalence (Princeton, N.J., 1966CrossRefGoogle Scholar); and Hofstadter, , “What Happened to the Antitrust Movement? Notes on the Evolution of an American Creed,” in Cheit, Earl F., ed., The Business Establishment (New York, 1964), 113–151Google Scholar.

³³ Stigler, , “The Theory of Economic Regulation,” Bell Journal of Economics and Management Science, II (Spring, 1971), 3–21CrossRefGoogle Scholar. See a'so Stigler, , “The Process of Economic Regulation,” The Antitrust Bulletin, XVII (Spring, 1972), 207–235Google Scholar. A few other economists have attempted interdisciplinary approaches. See, for example, Noll, Roger G., “The Behavior of Regulatory Agencies,” Review of Social Economy, XXIX (March, 1971), 15–19CrossRefGoogle Scholar; and Joskow, Paul L., “Pricing Decisions of Regulated Firms: A Behavioral Approach,” Bell Journal of Economics and Management Science, IV (Spring, 1973), 118–140CrossRefGoogle Scholar.

³⁴ New Haven, Conn., 1924.

³⁵ Blaisdell, , The Federal Trade Commission: An Experiment in the Control of Business (New York, 1932Google Scholar).

³⁶ Ibid., 293, 307. The comparison was made central in McFarland, Carl, Judicial Control of the Federal Trade Commission and the Interstate Commerce Commission 1920-1930 (Cambridge, Mass., 1933CrossRefGoogle Scholar). Also on the important subject of judicial review of regulation, see Jaffe, Louis L., Judicial Control of Administrative Action (Boston, 1965Google Scholar); and Shapiro, Martin M., The Supreme Court and Administrative Agencies (New York, 1968Google Scholar).

³⁷ Gaskill, , The Regulation of Competition (New York, 1936Google Scholar). This book examined not only the FTC, but also the recently expired National Recovery Administration. It was a broadside more than a scholarly work.

³⁸ Friendly, , The Federal Administrative Agencies: The Need for Better Definition of Standards (Cambridge, Mass., 1962CrossRefGoogle Scholar). Friendly was a Federal judge at the time. His book, heavily footnoted, provided a convenient guide to the legal literature on administrative procedure, a topic I have only touched on in this discussion. Representative of the voluminous publications of Redford, Emmette S. are Administration of National Economic Control (New York, 1952Google Scholar); American Government and the Economy (New York, 1965Google Scholar), and The Regulatory Process: With Illustrations from Commercial Aviation (Austin, Texas, 1969Google Scholar).

³⁹ Friendly, The Federal Administrative Agencies, 175; one example of the influence of Friendly's views may be found in Cary, William L. (a former chairman of the SEC), Politics and the Regulatory Agencies (New York, 1967Google Scholar).

⁴⁰ Sharfman, , The Interstate Commerce Commission: A Study in Administrative Law and Procedure (4 vols. in 5, New York, 1931-1937Google Scholar). Sharfman was an economist, not a lawyer or political scientist. I have included his work in this section because it more closely resembles the work of the 1930s political scientists than that of recent economists.

⁴¹ Herring, , Public Administration and the Public Interest (New York, 1936Google Scholar); Herring, , Federal Commissioners: A Study of Their Careers and Qualifications (Cambridge, Mass., 1936CrossRefGoogle Scholar).

⁴² Cushman, , The Independent Regulatory Commissions (New York, 1941Google Scholar). The Committee, known popularly as the “Brownlow Committee,” after its Chairman, Louis Brownlow, was one of a long series of ad hoc groups studying regulation and organization in the Federal establishment. Subsequent studies produced the Hoover Commission Report (numbers 1 and 2), the Landis Report, and the Ash Council Report.

⁴³ Princeton, N.J., 1955. In the mid-1950s, there was nothing like a consensus on regulation within political science. Bernstein's views may be contrasted with those of Redford, Administration of National Economic Control (note 38 above), and of Lane, Robert E., The Regulation of Businessmen (New Haven, Conn., 1954Google Scholar). See also the uncritical quasi-history by Anderson, James E., The Emergence of the Modern Regulatory State (Washington, D.C., 1962Google Scholar).

⁴⁴ In the order listed: Stanford, Cal., 1961; New York, 1966; and New York, 1969.

⁴⁵ The solutions offered by the anti-pluralists varied, and in each book, the diagnosis seemed superior to the prescription. Lowi proposed a return to basic constitutional principles and the promotion of “juridicial democracy.” McConnell suggested the strengthening of mechanisms that permitted the entire people to act as one. Invigoration of broad constituencies would limit the scope of “capture,” promote citizen participation, and give substantive content to the “public interest.”

⁴⁶ Auerbach, Carl A., “Pluralism and the Administrative Process,” The Annals, CD (March, 1972), 1Google Scholar. On public interest lawyers, see Lazarus, Simon, The Genteel Populists (New York, 1974Google Scholar), Chapter 10; Goulden, Joseph C., The Superlawyers (New York, 1972Google Scholar), Chapter 10; and Leone, Richard C., “Public Interest Advocacy and the Regulatory Process,” The Annals, CD (March, 1972), 46–58Google Scholar.

⁴⁷ Posner, , “Natural Monopoly and Its Regulation,” Stanford Law Review, XXI (February, 1969), 548–643CrossRefGoogle Scholar; Posner, , “Taxation by Regulation,” Bell Journal of Economics and Management Science, II (Spring, 1971), 22–50CrossRefGoogle Scholar; Posner, , Economic Analysis of Law (New York, 1973Google Scholar); Posner, , “Theories of Economic Regulation,” Bell Journal of Economics and Management Science, V (Autumn, 1974), 335–358CrossRefGoogle Scholar.

⁴⁸ The logical starting place here is the work of Alfred D. Chandler, Jr., though it customarily deals less with regulated enterprises than with manufacturing. See, in particular, Strategy and Structure: Chapters in the History of the Industrial Enterprise (Cambridge, Mass., 1962Google Scholar); “The Structure of American Industry in the Twentieth Century: A Historical Overview,” Business History Review, XLIII (Autumn, 1969), 255–298Google Scholar; and Chandler, , ed. and comp., The Railroads: The Nation's First Big Business (New York, 1965Google Scholar). See also Eichner, Alfred S., The Emergence of Oligopoly: Sugar Refining as a Case Study (Baltimore, Md., 1969Google Scholar). A superior analysis of both the evolution of big business and of its historiography is Porter, Glenn, The Rise of Big Business 1860-1910 (New York, 1973Google Scholar), which emphasizes the capital-intensive nature of modern enterprise. A strong statement of the relationship between production process and industry structure appears in Averitt, Robert T., The Dual Economy: The Dynamics of American Industry Structure (New York, 1968Google Scholar), Chapter 3.

⁴⁹ Discussions of historians' application of organizational theory include Galambos, Louis, “The Emerging Organizational Synthesis in Modern American History,” Business History Review, XLIV (Autumn, 1970), 279–290CrossRefGoogle Scholar; Soltow, James H., “American Institutional Studies: Present Knowledge and Past Trends,” Journal of Economic History, XXXI (March, 1971), 87–105CrossRefGoogle Scholar; and Cuff, Robert D., “American Historians and the ‘Organizational Factor,’” Canadian Review of American Studies, IV (Spring, 1973), 19–31CrossRefGoogle Scholar. Cuff's, own The War Industries Board (Baltimore, 1973Google Scholar), is in many respects a model organizational study.

⁵⁰ An early suggestion of “regulation-mindedness” appears in Jaffe, Louis L., “The Effective Limits of the Administrative Process: A Reevaluation,” Harvard Law Review, LXVII (May, 1954), 1113Google Scholar.

⁵¹ Lively, , “The American System: A Review Article,” Business History Review, XXIX (March, 1955), 93Google Scholar.