A recent oped in the Financial Times bears a strange title: “On America’s Ramshackle Railroads, Republicans Concede the Limits of the Market.” Although this sentence does not appear in the piece itself, it does reflect its author’s opinion. Oren Cass, president of American Compass and a proponent of industrial policy and protectionism, argues that the frequent derailments of private freight trains in America justify more regulation of railroads. He congratulates Republicans like J.D. Vance, Marco Rubio, Josh Haley, Donald Trump, and Mitt Romney for supporting more regulation. Conservatives like them, Cass argues, have fortunately “become increasingly cognizant in recent years that regulation can be far from perfect and yet still far better than the status quo.” He does not mention the accidents of passenger trains of Amtrak, a heavily subsidized and money-losing corporation established by Congress in 1971 (under Richard Nixon), and whose major shareholder is the federal government.
In fact, it can probably be said that American railroads have been a major part of federal industrial policy, without the name, for a century and a half, not to mention heavy regulation by state governments (including, in the South, forcing them to discriminate against Black passengers). This industrial policy has had ups and downs, and random walks, as is typical of industrial policies. The Council of Foreign Relations writes:
The mid-to-late nineteenth century saw thousands of miles of track laid across the United States, spawning an era of economic integration that connected the East and West Coasts for the first time. By the turn of the twentieth century, rail companies—which offered both passenger and freight rail services at the time—provided one of the cheapest and most efficient modes of transport. But in the first half of the 20th century, demand shifted to new forms of transportation, especially cars and planes. Meanwhile, a suite of laws that expanded the federal government’s power to set freight prices and enforce other stringent rail regulations increasingly challenged the system.
The second half of the century saw a rail revival. Congress established Amtrak in 1971, ushering in the present era of publicly owned and subsidized passenger rail.
Among the major agents of the federal railroad regulation figure the Interstate Commerce Commission, created in 1887, and the Federal Railroad Administration in 1966. There was some deregulation with the Staggers Rail Act of 1980, but I think nobody would argue that it negated the “limits of the market.” The Moving Ahead for Progress in the 21st Century Act of 2012 and the Fixing America’s Surface Transportation Act of 2015 continued to fit well in a rail industrial policy—I mean an industrial policy as it exists on earth, not as it should be in the minds of nirvana ideologues.
The idea that Republicans have just now decided to concede the limits of the market is at the very least misleading. If we take a general look at all federal regulations, it appears that the GOP has continuously added to the stock of regulations, just as the Democrats did. The chart below shows the evolution of federal regulation as measured by the number of prohibitions and mandates in the Code of Federal Regulations, which is the stock of total net regulations at the end of each year. Over the whole period for which this database is available, it is not easy to see a clear difference between the times when the Democrats and the Republicans held power in DC. The only two instances when a significant but temporary drop in total regulations are found in the first half of the 1980s under Ronald Reagan and in the mid-1990s under Bill Clinton. It is unlikely that the modest drop toward the end of Donald Trump’s administration in 2019 would have continued. (Older data, a bit more favorable to the Trump administration on that score, can be found in my Regulation article “The Trump Economy: Three Years of Volatile Continuity.”)
Most Republicans and Democrats have long enforced limits of the market more than understood its benefits. It is true that libertarians and classical liberals have, since the mid-20th century, found more compagnons de route in the GOP than in the Democratic Party, but it is a matter of degree. And the degree of differentiation has been rapidly shrinking.

Source: QuantGov, https://www.quantgov.org/federal-regulatory-growth
READER COMMENTS
Andrew_FL
Jun 3 2023 at 10:18am
Part of the problem is that the regulatory state is capable of autonomously expanding. The agencies make new rules and they do so regardless of who is President or who controls Congress, even if the President or Congress at a given time would like to see fewer regulations getting made. It is because of this, rather than Republicans and Democrats being equally sanguine towards regulation, that explains the consistent increase under both.
Pierre Lemieux
Jun 3 2023 at 10:57am
Andrew: You are right, that’s an important factor in the short run. I appreciate your careful formulation. Yet, regulatory agencies are typically under the president’s power or influence and, in any case, derive all their powers from laws adopted and amended by Congress. If the GOP politicians had been concerned about the evolution of regulation, especially when they held both Houses (in 2016-2018, for a recent example), they could have changed the whole regulatory framework, if not otherwise, at least gradually over half a century.
Pierre Lemieux
Jun 3 2023 at 11:16am
Andrew: Your comment further illuminates the very short horizon of politicians. The devise “industrial policies” for the next two years.
Craig
Jun 3 2023 at 6:33pm
“Part of the problem is that the regulatory state is capable of autonomously expanding. ”
Indeed and the flip side of this is that expansion is deferred to by legislative and judicial branches. The judicial branch courts even have a doctrine which is that one must first ‘exhaust their administrative remedies’ before resorting to suing in courts in the Judicial Branch. There are administrative law judges and frankly there should be no such thing.
Pierre Lemieux
Jun 4 2023 at 12:23am
Craig: It’s an old classical liberal idea that administrative judges should not exist.
Ken Sinner
Jun 3 2023 at 10:57am
“…in the mid-2000s under Bill Clinton.”
Wha???
Pierre Lemieux
Jun 3 2023 at 11:01am
Ken: Sorry. Typo. I will correct it right now. Thanks.
Richard Fulmer
Jun 3 2023 at 4:13pm
The growth chart suggests that the periodic effusions of apocalyptic hysteria over the wanton slashing of regulatory protections against the evils of unfettered capitalism were greatly exaggerated.
Pierre Lemieux
Jun 3 2023 at 4:27pm
Richard: Greatly, indeed.
Craig
Jun 3 2023 at 5:59pm
This is another reason I support #nationaldivorce after all you can’t get less federal regulation than no federal regulation. The system of governance envisioned by the Founders was one where the federal government would handle federal issues, those enumerated in Art I, sec 8 of the 1787 Constitution and the states would handle state issues, typically referred to as the reserved powers of the state to regulate for health, safety and welfare. Indeed Federalist 45 states: “The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce; with which last the power of taxation will, for the most part, be connected.”
What’s resulted since the New Deal is a doubly inefficient mode of government known as ‘cooperative federalism’ which notwithstanding the ‘cooperative’ moniker is simply a bad way to govern. The rise of the administrative estate has seen the Executive Branch take on the extra-constitutional roles known as quasi-legislative and quasi-judicial which is now so entrenched that such an extreme setup is now the norm and my criticism of it is the extremism, that’s how far gone this regime is. In fact most recently the branch of Congress purportedly vested with authority over ‘power of the purse’ saw many members urging the Executive Branch to take matters into its own hands and ‘invoke the XIV Amendment’ or mint a funny platinum token to circumvent statutory limitations on borrowing. And why shouldn’t the regime do this, why respect statutory limits, after all the regime doesn’t respect any constitutional limits.
“You must first enable the government to control the governed; and in the next place oblige it to control itself.” Madison in Federalist 51.
They failed and the result is an unneeded layer of government that should be relegated to the dustbin of history.
Thomas Hutcheson
Jun 3 2023 at 7:11pm
The headline seems to imagine a time when Republicans were more than instrumentally friendly to markets.
David Seltzer
Jun 3 2023 at 8:53pm
It seems both parties have interfered with markets so as to limit competition. The Jones Act, introduced by Wesley Jones, requires all goods transported by water between U.S. ports be carried on ships that have been constructed in the United States, fly the U.S. flag, are owned by U.S. citizens, are crewed by U.S. citizens and U.S. permanent residents. Protectionist gov officials champion the law while the act restricts trade via waterways and increases prices. Decry this as we might, I’m convinced much of this will never change.
Craig
Jun 3 2023 at 8:58pm
“Decry this as we might, I’m convinced much of this will never change. ”
With respect to the Jones Act you may be correct. I suspect that the Jones Act also typifies how its hard to generate opposition to things where the costs are widely dispersed.
I can craft a fact pattern that likely would lead to an immediate uproar. All individual cabotage between states must be done in double-fendered US made cars.
Little ridiculous of course to hopefully get a small chuckle, but for sure something like that would impact millions of people hoping to travel interstate in foreign cars.
David Seltzer
Jun 3 2023 at 9:41pm
Craig: I did get a little chuckle. Thanks. People are already traveling interstate in foreign cars. Regulating only double-fendered American cars now would initiate an uproar of epic proportion. Your example may be more prescient than you imagine. If Governor Newsom has his way: If one arrives at the California state line in a car powered by an internal combustion engine, will that person be turned away or charged an enormous entrance tax to underwrite charging station infrastructure for EV’s?
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