“An Elephants’ Graveyard”: the Deregulation of American Industry in the Late Twentieth Century
Richard Langlois

It has become conventional to describe the deregulation of American industry in the late twentieth century in ideological terms – as a manifestation of, and perhaps even as the literal result of, the rise of so-called neoliberalism. Drawing on the theory of institutional innovation, this paper argues to the contrary that the era of industrial deregulation of the late twentieth century was largely a product of the misalignment of the postwar regulatory regime with the realities of economic growth. This misalignment created profit opportunities for entrepreneurs not only in the realm of technology but also, and perhaps more crucially, in the realm of institutions. In some cases, entrepreneurs expended resources in order to foment political change. In other cases, technological and institutional innovation, aided at times by the depredations of the regulation itself, so reduced the available rents of a regulatory regime that its supporting coalition collapsed. The late-century reinvention of the American economy may well have mirrored and abetted the Zeitgeist, but its true causes lay in economic realities on the ground.