Three Big Things:
1. After several states attempted to limit the power of railroads and grain storage facilities on behalf of farmers and other citizens, Congress passed the Interstate Commerce Act (1887). This established the Interstate Commerce Commission (ICC) to regulate railroads, including their shipping rates and route choices.
2. The ICC was the first federal regulatory agency; it’s “success” spawned hundreds of others in subsequent decades. When you hear people complain about “big government,” these are a big part of what they mean. At the same time, they remind us that economic systems are not natural rights; they’re practical mechanisms designed to serve the largest number of people in the most efficient ways possible – at least in theory.
3. Ideally, regulatory agencies attempt to balance the good of society and the general public with the rights of companies to make reasonable profits from providing useful goods and services. They oversee “public services” – things considered essential for most citizens but which don’t easily lend themselves to a competitive marketplace due to the infrastructure required or the necessary scale of the service.