Saturday , January 22 2022
Home / David Henderson /No Single Incident of Anticompetitive Actions

No Single Incident of Anticompetitive Actions

Summary:
In my recent Hoover article, “Railroad Regulation’s Poor Track Record,” Defining Ideas, November 18, 2021, I wrote the following: It is true that in some circumstances, shippers will be “captive”: they will be at the mercy of the one railroad that goes to or by their location. To deal with this, federal regulators adopted “Competitive Access Rules” in 1985. These rules give the STB the power to force reciprocal switching. But to do so, the regulators must show a market failure and harm that results from that failure. The aforementioned Pociask and Sigaud write, “To be clear, since 1985, regulators have not found a single incident of anticompetitive actions by railroads that justified reciprocal switching” [italics in original]. If that is true, it seems that

Topics:
David Henderson considers the following as important: , ,

This could be interesting, too:

Bryan Caplan writes A Discriminating Exception

Scott Sumner writes Decentralized Tokyo

David Henderson writes Response to Scott Sumner on Covid Caution

Alberto Mingardi writes Italy vs Amazon

No Single Incident of Anticompetitive Actions

In my recent Hoover article, “Railroad Regulation’s Poor Track Record,” Defining Ideas, November 18, 2021, I wrote the following:

It is true that in some circumstances, shippers will be “captive”: they will be at the mercy of the one railroad that goes to or by their location. To deal with this, federal regulators adopted “Competitive Access Rules” in 1985. These rules give the STB the power to force reciprocal switching. But to do so, the regulators must show a market failure and harm that results from that failure. The aforementioned Pociask and Sigaud write, “To be clear, since 1985, regulators have not found a single incident of anticompetitive actions by railroads that justified reciprocal switching” [italics in original]. If that is true, it seems that Biden’s proposed regulation is in search of a problem.

Notice my “if” in the last sentence of the paragraph. The reason for that is that I worried that Pociask and Sigaud exaggerated but did not have an easy independent source to go to. But after the article was published, Ted Greener, who is the assistant vice president for public affairs with the Association of American Railroads, contacted me, noting the article. So I took the opportunity to ask him if an “if” was required. He said it wasn’t. Specifically he wrote:

It is indeed true, yes. Underscoring the potential flaws of a significant shift in how switching is handled via regulation. The 2016 NPRM [Notice of Proposed Rule Making], which could theoretically be implemented without a new proposal, removed the need to show competitive harm in petitioning for forced access. That proposal was largely based on 2011 data, meaning a 2021 rule could be supported by information now a  decade old. This raises clear questions.

David Henderson
David R. Henderson (born November 21, 1950) is a Canadian-born American economist and author who moved to the United States in 1972 and became a U.S. citizen in 1986, serving on President Ronald Reagan's Council of Economic Advisers from 1982 to 1984.[1] A research fellow at Stanford University's Hoover Institution[2] since 1990, he took a teaching position with the Naval Postgraduate School in Monterey, California in 1984, and is now a full professor of economics.[3]

Leave a Reply

Your email address will not be published. Required fields are marked *