An End to Economic Regulation?

The end of the Cold War and the collapse of Communism in the 1990s have been attributed in part to the triumph of markets over government control of resources. Despite the Central Intelligence Agency’s best efforts to overstate the national output of the Soviet Union, by the 1980’s it had become evident to everyone – particularly to its own citizens-- that the Soviet system could no longer continue to support an army and provide ordinary citizens a modern standard of living. This remarkable “end of history”1 came only about a decade after the beginning of the wave of deregulation that first gripped the United States, but then spread to the United Kingdom and – to a lesser extent – to the European continent. This suggests that, even in the West, the importance of markets was not fully appreciated until very recently. 2 Despite its enormous success, the deregulatory movement may be stalled and even subject to reversal in the wake of the spectacular failure of California electricity “deregulation, ” doubts about the United Kingdom’s electricity and rail privatization/deregulation policies, and the spectacular collapse of the Enron Corporation