This is an important and well-written book, developing a subtle and complex argument. It focuses on the strengthening of the American regulatory tradition in the New Deal and the breakdown of regulation in the 1970s and 1980s, in airlines, gas, telecommunications, and banking...The result is a richly complex narrative. (Leslie Hannah Economic History Society [UK]
seems almost certain to become a point of departure for a lively subsidiary literature testing and extending its insights...Vietor has brought together in an elegant framework a way of thinking about economic regulation. Researchers will acknowledge their debt to him by probing his model with questions and with their efforts to pin down with greater precision cause and effect relationships. What causes regulatory ossification? What leads firms to surrender rather than fight (AT&T comes to mind here)? What does the competition do? What weight should be put on CEO's 'visions?' Where do the restructuring ideas come from? Are the first mover advantages that important (they seem to be squandered in these cases as they were famously in automobiles so long ago)? Are regulated markets more shaken by macro-economic or regulatory change? Vietor has contrived to make us rethink the entire cycle of the regulatory epoch in American history. (Viv Nelles Business History Review
Richard Vietor has put all students of U.S. economic regulation in his debt with this penetrating study of four firms through five decades...For readers who want a graduate education in the subject there's no better place to begin. (Robert Cuff Canadian Journal of History
From the Back Cover
This is the story of a revolution in American industry: the massive deregulation of markets by the government starting in the late 1970s. After an era of New Deal controls that lasted forty years, and in response to a stagnating economy, a new intellectual and political consensus developed in support of competitive markets. Beginning in 1978, Congress enacted a raft of deregulatory reforms, which federal agencies implemented during the early 1980s. Suddenly, the structure of markets in these sectors changed dramatically: new entrants flooded in, product and service markets were redefined, and prices fell. To survive, incumbent firms were forced to adopt entirely new strategies. Business historian Richard Vietor explains how each of four major firms was challenged by deregulation, and how its leadership struggled to adjust to new forms of intense competition. At American Airlines, we see Robert Crandall grounding aircraft, reorganizing routes, and expanding its reservation system into a competitive weapon. When El Paso Natural Gas was threatened with excess capacity and overpriced contracts, Travis Petty struggled with a strange new regulatory regime of unbundled products and services, eventually restoring his company to profitability. At AT&T, Charles Brown and then Robert Allen coped with MCI and divestiture, building a new integrated company to manage information worldwide. And Bank-America, caught short with bad loans and a deep recession in the early eighties, nearly failed before Sam Armacost and then Tom Clausen achieved an amazing turnaround in the mid-1980s. These four parallel stories illustrate a dynamic process of market restructuring and organizational adjustment. We seemanagers and regulators alike painfully learning to operate effectively as their business and political environments shift around them. The ability of top management to escape operational preconceptions, to change corporate mindsets, to redefine existing competencies, and to exercise leadership determined which firms would survive in the new world of deregulated competition.