No Place For Law and Economics: The Controversy over Railroad Regulation before the Hepburn Act

Nicola Giocoli

A chapter in Research in the History of Economic Thought and Methodology, 2016, vol. 34A, pp 293-338 from Emerald Group Publishing Limited

Abstract: At the turn of the 20th-century railroad regulation was hotly debated in the United States. Railways were accused of abusing of their monopolistic position, in particular by discriminating rates. Public opinion’s pressure for tighter regulation led to the 1906 enactment of the Hepburn Act, which strengthened the powers of the Interstate Commerce Commission. American economists actively participated in the debate. While most of them sided with the pro-regulation camp, the best economic analysis came from those who used the logic of modern law and economics to demonstrate how most railroads’ practices, including rate discrimination, were simply rational, pro-efficiency behavior. However, as relatively unknown Chicago University economist Hugo R. Meyer would discover, proposing that logic in public events could at that time cost you your academic career.

Keywords: Railway economics; rate regulation; Hepburn Act; A. T. Hadley; F. W. Taussig; H. R. Mayer; B13; K23; L51 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:eme:rhetzz:s0743-41542016000034a009

DOI: 10.1108/S0743-41542016000034A009

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