Regulated Industries in a Nutshell
By Richard J. Pierce Jr. and Ernest Gellhorn
In Regulated Industries, Professor Richard J. Pierce Jr. of the George Washington University School of Law and the late Professor Ernest Gellhorn of George Mason University School of Law provide an introductory-level overview of economic regulation and related law. Their treatise discusses the theoretical and practical issues related to various methods of regulation, but it does not explore the specific regulation of any particular industry in great depth. As a result, Regulated Industries is especially useful for one studying regulation generally. However, someone planning to study a specific regulated industry (especially a person without a strong background in economics) would also benefit from reading the book.
Regulated Industries begins by introducing the purposes, scopes, types, and methods of regulation in the United States in a very general sense, and it briefly discusses the relationship between laissez-faire economic theory and the American legal framework for creating, monitoring, and evaluating various forms of regulation. This discussion also identifies two issues inherent in economic regulation. First, regulation often strives to achieve social and commercial economic goals that compete with one another. Second, by attempting to balance those competing interests through regulation, regulators substitute their own judgment for the judgment of business professionals and the market’s natural impulse toward efficiency. These issues underlie both policy and legal evaluations of economic regulation of varying types and scopes, as well as across industries.
Pierce and Gellhorn then explain some basic economic principles and how the operation of a market economy can create problems that policymakers attempt to address through regulation. For readers with a strong background in economics, this explication of the demand schedule, competition and monopolies, externalities, and various forms of market failure will seem like old hat. For those of us whose economic training ends with an “econ for dummies” course we may have taken somewhere along the line, these concepts provide a foundation necessary for understanding economic regulation. The treatise’s subsequent sections flesh out the legal basis for regulation; explain various methods of regulation, their application, and their treatment by the judiciary; and discuss the problems associated with regulatory failure, deregulation, and regulatory reform.
Regulated Industries, like the rest of Thomson West’s “In a Nutshell” series, provides students and lawyers with a succinct guide to a specific area of law. Much of the attraction of such supplements lies in their brevity. However, as noted in the preface of Regulated Industries, such works often must gloss over complex and nuanced issues. Works from the “In a Nutshell” series tend to be even more concise than other commercial outlines and hornbooks and may be slightly more susceptible to that problem than others. In most cases, Regulated Industries attempts to address this tendency by recommending sources that provide more in-depth analyses of the issues discussed.
One other potential word of caution: Regulated Industries was last published in 1999. Because of the broad conceptual focus of this outline and the fact that most of the law related to economic regulation appears to have been established well before the latest publication of this treatise (judging by the dates of statutes, regulations, and cases cited throughout the text), Regulated Industries may remain largely up-to-date despite the length of time that has passed since it was last updated. But it seems quite possible that some significant changes have occurred in the last nine years, and treatises that include more recent developments in the area of law they discuss, tend, of course, to be the most useful for both students and practitioners.
Regulated Industries provides a concise and understandable overview of the theories, applications, and legal parameters of economic regulation in the United States. Although some readers may find even the most basic economic principles intimidating, Regulated Industries does well to make such concepts accessible for readers without strong economic backgrounds. The treatise’s focus is broad, and, as a result, it provides a useful tool for those studying regulation generally and good background knowledge for those studying the regulation of any specific industry.
Jason Allen is a student at Northwestern University School of Law; he may be reached at email@example.com.