Transport Deregulation... and all that

Abstract

While the regulation of transportation has a legitimate place in history, it became apparent by the decades of the 1960s and 1970s that transportation regulation had suppressed innovation, denied the public a variety of price and quality options, sheltered inefficiency, discouraged intermodalism, and encouraged the wage-price spiral. The author reflects on our experience with deregulation and concludes that deregulation has opened transportation to competition and has produced a striking deconstruction of markets. This new competition has provided numerous benefits to the public including a rate structure in much closer alignment with costs, a greater variety of price and quality options, striking improvements in efficiency, a downward pressure on inflated wages, lower average prices, and an overall improvement in the quality of service. The author concludes that while there is no single cure for the economic problems of the country, preservation and restoration of competition is certainly an important one.