Kahn, Alfred E. Lessons from Deregulation: Telecommunications and Airlines after the Crunch.

• Author: Morris, Terry R.
• Position: Book Review

Kahn, Alfred E. Lessons from Deregulation: Telecommunications and Airlines after the Crunch. Washington, D.C.: AEI-Brookings Joint Center for Regulatory Studies, 2004. 88 pp. Paper, $16.95.

Since the late 1970s, the United States has been deregulating industries regulated since the New Deal. Not surprisingly, opinions on these deregulation policies vary widely. Critics blame deregulation for everything from the savings-and-loan crisis, to an increase in trucking accidents, to doors being blown from airplanes, and to the electricity debacle in California, and that is only part of the list. On the other hand, defenders maintain that, despite its problems, deregulation has been beneficial to the general public, and that going back to the bad old days of the 1960s is out of the question. Into this debate comes Alfred Kahn's Lessons from Deregulation.

Kahn's credentials are beyond dispute. An emeritus professor of economics from Cornell, he is perhaps best remembered as the chairman of the Civil Aeronautics Board (during the Carter administration) who brought about its demise by deregulating the airline industry. The bill, which included U.S. Senator Edward M. Kennedy (D-MA) among its sponsors, was enacted in 1978. The board ceased to exist five years later according to plan. Kahn is also the author of a leading work on deregulation, The Economics of Regulation (2 vols., 1970-71). Previously, he had worked on deregulation matters for the New York Public Service Commission. Also, Kahn was actively involved in the deregulation of the telecommunications industry during the Clinton years. Now, in his eighties, he continues to write and to testify before Congress on the issue.

The purpose of this work, co-sponsored by the American Enterprise Institute and the Brookings Institution, is to add to the public discussion about deregulation without necessarily reflecting the views of either sponsoring agency, that according to Robert W. Hahn, executive director, and Robert E. Litan, director of the AEI-Brookings Joint Center for Regulatory Studies, who contributed the book's foreword.

Kahn's thesis is that, while deregulation has produced some "catastrophic outcomes" for investors, these did not necessarily result from deregulation itself. "Indeed, ... more deregulation, not less, is the order of the day" (p. vii). He confines his analysis to the two industries in whose deregulation he has played a significant role: air travel and telecommunications.

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