Richard H.K. Vietor

Contrived Competition: Airline Regulation and Deregulation, 1925–1988

Although many have studied regulatory policy in the United States, few have viewed it as a process, shaping markets and industries and, in turn, being affected by the structures it helped to create. By looking at the forty-year history of airline regulation and then focusing on one companys adaptations to deregulation, this article demonstrates that monocausal explanations fail to capture the complex and dynamic nature of the interaction between regulation and competition in America.

Economics and Politics of Deregulation: The Issue of Telephone Access Charges

The Access Charge Plan, a marginal-cost pricing system for long-distance telephone service, was devised by the Federal Communications Commission in 1982 to facilitate the transition from regulated monopoly to competition. In little more than a year after the plan was proposed, as the plans distributive and competitive impacts were recognized by a host of stakeholders and political interests, a flood of opposition Abstract swamped the initiative. What emerged, although distinctly different from the system that had previously existed, nevertheless continued to reflect some of the objectives of the past regime, including subsidies to residential users and some shelter for AT&Ts principal competitors. The strength of the political process that produced these modifications was due in part to elements in the original FCC proposal that were not essential to its central purpose.

The Synthetic Liquid Fuels Program: Energy Politics in the Truman Era

As the end of the era of abundant natural petroleum oils approaches, the United States finds itself heavily committed to a way of life based on cheap liquid hydrocarbon fuels. Whether such fuels will be available at any price in adequate quantities in the future, is the question today. Professor Vietor shows that it was also a serious question for some years after World War II, and that the United States carried a long way towards definitive demonstration a program for the development of high-volume synthetic liquid fuels production techniques. What that program accomplished; how the interests, public and private, who were responsible for the American fuel supply reacted to it; and why it was shelved for 25 years are among the points Vietor covers. The reader is left to weigh for himself the several reasons why this program was sidetracked, but he can hardly fail to conclude that where such fundamental matters as energy policy are concerned, American planning has been distressingly short range.

CONTRIVED COMPETITION -- ECONOMIC REGULATION AND DEREGULATION, 1920S- 1980S /

The study of regulation must take far more account of what happens within companies than is usually the case with academic work, or we will never get a clear idea of the actual impact of regulation on market structures or firm behaviours. This article summarises a major research project focused on four dominant US firms in four of the most important regulated industries: AT&T in telecommunications, BankAmerica in commercial banking, El Paso in natural gas, and American in airlines. In the United States, the fundamental premise of New Deal-induced regulatory regimes was that competition represented a problem for public policy. The deflationary, high-unemployment macroeconomy of the early 1930s, and the simultaneous slowdown in technological progress, led policymakers to install regulatory systems that controlled prices, limited entry, and promoted redundant employment. These systems led regulated firms in turn to de-emphasise marketing, highlight services, and forgo the intense inter-firm competition chara...

United States Foreign Oil Policy since World War I: For Profits and Security (review)

Given the salience of the topic, it probably seemed like a good idea to publish a second edition of Stephen Randall’s book some twenty years after the first. In hindsight, it was not. The three new substantive chapters, which purport to cover the period from 1950 to 2004, are completely different than the first nine chapters, covering the period 1919 to 1948. The new chapters are not rooted in the same kind of primary research and do not deal with issues at anything like the same level of analysis. The result is therefore disappointing. The first edition of the book was based on extraordinary primary research in a dozen archives and hundreds of government documents. Randall had spent years mastering the detail of business-government interaction in foreign oil policy during thirty years of wartime and interwar history. Starting with the early development of overseas (that is, non-U.S.) oil exploration, production, and trade, Randall carefully examined whether U.S. policy was designed to help U.S. oil companies, or whether the companies served the interests of U.S. policy. His analysis carried the reader through the ups and downs in business-government relations during the Hoover era of growth, then depression; efforts to deploy production and marketing cartels to control excess output in the Middle East; wartime mobilization and an attempt to create a national oil corporation; difficulties with internationalism and Anglo-American cooperation; and the resurgence of private enterprise after the war. Throughout this thirty-year analysis, Randall addressed human interactions at a micro level—relations between oilmen and government bureaucrats. Unfortunately, he did so in exceedingly long paragraphs, with little effort to organize ideas and themes. There were few charts or tables, and it was at times difficult to know how much was being produced and exported, by whom, and from which countries. And it was even difficult to know much about the policy issues, or how they related to the formulation of domestic energy policies. In the three new chapters, Randall moves to a more macro level— breezily floating through major oil issues, wars, and relations with Middle Eastern and Latin American countries. There are at least a few tables and charts to show output, reserves, and prices. But there is little on relations between industry and government players. The research was not done. In his conclusion, Randall offers a more conceptual view about oil policy involving “a blend of Jeffersonian liberalism with the statism of twentiethcentury reformers” (p. 322). The tension between these two values resulted, T E C H N O L O G Y A N D C U L T U R E

Energy Policy in America Since 1945.

In the political economy of energy, World War II was a significant watershed: it accelerated the transition from dependence on coal to petroleum and natural gas. At the same time, mobilization provided an unprecedented experience in the management of energy markets by a forced partnership of business and government. In this 1985 book, Vietor covers American policy from 1945 to 1980. For readers convinced that big business contrived the energy crisis of the 1970s, this story will be disappointing, but enlightening. For those committed to theories of regulatory capture or public interest reform it should be frustrating. More than a history of government policy making, this book provides us with an innovative and insightful approach to the study of business-government relations in modern America. For managers, bureaucrats, and anyone interested in seeing a more effective national industrial policy, this history should put the relationship of business and government in a critical new perspective.

Perspectives on the Bell System: Strategy, Structure, Technology, and Unionism

Divestiture of the Bell System in 1984 dramatically reversed more than a century of integration, standardization, and centralization. These factors together produced the worlds largest corporation (in both assets and work force) which, guided by regulation, managed the worlds largest and most effective telecommunications network. Although technology and economics drove these developments, none were inevitable or easily accomplished. All four of the histories reviewed in this essay attest to the gradual, plodding, and often disorderly administrative efforts that produced the Bell System, the telephone network, and the Communications Workers of America (CWA). Yet, the degree of overlap among these four books is surprisingly small: in part because each study is narrowly conceived, and in part because the story itself has epic proportions. Two of the books examine top managements approach to horizontal and vertical integration. The third focuses on the process of technical innovation and its implementation by middle management. The fourth book starts from the bottom up, tracing the evolution of a centralized labor organization. While each book adds a piece to the larger history