To Susan, with love

Preface

hen I began to write this book, I was intrigued by the mys-

VV teries that seemed to surround the history of government regulation in America. Why, I wondered, had regulation so often failed to serve the "public interest," as it had been intended to do? Why, if the commissions had proved so ineffective, did they remain active as apparently permanent parts of the government? Why, if agencies were so often "captured" by interests they were supposed to be regulating, did not other branches of government step in and take away their legislated powers?

Plausible attempts to answer these questions, as it turned out, lay close at hand; for regulation is one of the most written-about subjects of our time. As a topic rich in potential insights about many different themes of American culture, regulation has received concentrated attention from innumerable popular writers as well as from hundreds of scholars based in various academic disciplines: law, economics, political science, sociology, business administration. The theoretical frameworks offered by these scholars, as much as the vast body of their empirical research, have been indispensable to me. I wanted to write a history, however, and my book does not resemble most of the existing scholarly literature from other disciplines.

On its surface, this book is about four important prophets of regulation, whose work spans more than a century of experience: Charles Francis Adams, Louis D. Brandeis, James M. Landis, and Alfred E. Kahn. I might have called them architects or innovators of regulation, as all of them were. But the designation prophets seems better to express the unusual combination each one repre-

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sented of both theorizing about regulation and actually doing it, of both design and implementation.

In treating these men, I am interested in what they thought about regulation, what they accomplished, and how things turned out for them and for the agencies they influenced. Curiously, although we have been told a very great deal about regulation, we remain relatively ignorant about the regulators themselves. Furthermore, since the prevailing burden of judgment holds overwhelmingly that regulation in America has been a failure, the necessary corollary suggests that regulators themselves have failed. This assumption makes these men and women seem less interesting, more swept along by this or that historical determinism, and somehow less volitional than other types of public figures.

I am inclined to reject this line of thinking. Individual regulators clearly made an enormous difference. Each of my four major characters represented, in the jargon of social science, an "independent social force." Contrary to the popular image of regulation as a light that failed, most of the four proved historically successful. Yet they achieved their goals only under certain conditions—which I have taken care to identify—and only through a good deal of administrative artistry on their own part. For the core of my concern here is regulatory strategy: how the regulators themselves framed or failed to frame their purposes, and how they executed those purposes or failed to do so. In the language of administrative science, I am interested in both the formulation and implementation of policy. But policy remains a work of man.

Why choose these particular men? First, because together their careers cover the historical span of modern regulation in America. I wanted to write about regulation as a problem, not merely as an aspect of one particular period of American history. Surely the problem has been with us ever since colonial times, when merchants and churchmen argued over the idea of a "just price" for merchandise. Yet there has been no single watershed, no one era in which American regulatory policy became set once and for all. In the last hundred years, there have been four periods when regulation as a whole took on enhanced importance: the 1870s, the early years of industrialization; the period 1900-1916, often called the Progressive Era; the 1930s, during the New Deal; and the 1970s, when both regulation and deregulation somehow grew simultaneously. In this book each of these four periods is represented by a single member of my quartet.

PREFACE ix

Aside from providing inclusive coverage of the problem, another reason for selecting Adams, Brandeis, Landis, and Kahn is that each one profoundly influenced the historical evolution of regulation. One of them (Brandeis) indeed is regarded as a patron saint of the whole regulatory tradition; the other three represent more than twenty years of service on five different agencies—two state and three federal. In addition, three of the four were lawyers by training, and this proportion accords well with the occupational profile of all federal and state commissioners over the last century. Finally, all four men thought and wrote extensively about the complex relationship between business and government in America. In doing so they not only fulfilled their roles as prophets of regulation, but incidentally provided a treasury of primary sources for historical inquiry.

My approach fluctuates between the lives of men, economic theory, and historical incident. Each of the four biographical chapters is followed by a brief historical analysis in which I survey broad themes of regulation for the period under discussion. Together, the different parts of the book are designed to suggest the rich combination of human action and impersonal circumstance that constitutes the fabric of history—here the history of regulation, where the strands of volition and determinism are woven just as intricately as they are in the pattern of any other human activity.