Deregulation is the removal of barriers to trade often imposed by governing bodies. This context in that legislation leads to regulation which has an impact on trade.
However, it is not this type of regulation with which this section is dealing. In this context deregulation is the removal of rules which were imposed by governments in periods of central control. An example of this is the period after the Second World War. During the war, many industries and services came under the direct supervision of government to direct the economy to meets the nation’s wartime aims.
In the post-war era, such thinking continued with UK Labour Governments who then nationalised industries to continue the success of the wartime production. A good example is that of British Rail which was nationalised from the older independent companies in 1948. This thinking reflected a mood that central control and regulation would allow the country to prosper. In a manner, it revealed the socialist idea of central control which was common in many communist countries. British regulation did not go this far and indeed still operated within a western capitalist economy.
To demonstrate this further if you are the sole railway provider, then you are the only service available to all customers. This will mean that there is no competitive driving force. After all, we all know in today’s modern consumer world that competition within all markets has led to price drops and increases in customer services (some arguments refute this).
Just think of how many low-cost flights are now available. But also business creativity was also strangled. If there is no competition, there is no driving force to push for improved features or offer cheaper practices.
The move in the late 80s and early 90s to deregulate such industries and move to a free market was a controversial period in history with many heated debates which still linger today. But in the main – deregulation has now been accepted as the main thrust of all Governments.
Deregulation also allows the bureaucracy of governance to be reduced.
Bureaucracy is where the officials, employees, and people who run government departments and offices, or similar officers and employees who manage the details of operating a large business.
One example of removing bureaucracy is from the Bundesministerium des Innern – from the German Federal Government in 2003 to help foster innovation and technology by reducing bureaucracy.
The overall approach to reducing bureaucracy chosen by the Federal Government is based on the following principles:
