Regulation and Regulation, Then and Now: A look, back at the last 45 years and ahead at the next 45.

• Author: DeMuth, Christopher C.

Regulation magazine was founded in 1977, at an inflection point in the growth of regulation. In the early 1970s, Congress launched a fleet of new agencies such as the Environmental Protection Agency, Occupational Safety and Health Administration, and National Highway Traffic Safety Administration. They were fundamentally unlike the New Deal and progressive "independent commissions" that managed industrial cartels--two of which, the Civil Aeronautics Board and Interstate Commerce Commission, would soon be dismantled. The new ones were missionary rather than managerial, pursuing causes of significant interest to many citizens. Most were headed by a single official reporting to the president. And they made policy by "informal rulemaking" rather than case-by-case adjudication. The procedure, essentially unknown before 1970, enabled agencies to issue sweeping, prescriptive, industry-wide requirements costing hundreds of millions of dollars--and they were doing so routinely by 1977.

Those of us who were present at that creation knew something big was afoot, demanding a commensurate response. Our "regulatory reform movement" would sort out the good, bad, and ugly in the growing maze of government interventions. We wished to be done with price and entry controls in competitive markets. Where regulatory purposes were worthy or at least plausible, we would direct agencies away from "command and control," toward balancing benefits and costs and working with, rather than against, private economic incentives. A serious reform movement would require something other than railing against populist legislators and unaccountable bureaucrats; we would need to address "policymakers" as partners rather than adversaries and translate economic ideas from academese into clear, accessible arguments.

I was at the Harvard Kennedy School at the time, teaching and directing a faculty program on regulatory reform. I was thrilled by the American Enterprise Institute's inauguration of Regulation--addressed to those proliferating policymakers and to students, journalists, and general readers. It was strongly free-market, but empirical rather than doctrinaire; lucid in explaining abstruse legal doctrines and political theories; and intent on bringing out the common sense in economic reasoning. In 1979, I submitted a paper assessing the Carter administration's rulemaking reform efforts and weighing two ideas for building on them: cost-benefit analysis of individual rules...