Deregulation refers to the deletion, abandonment, or relaxation of various laws, rules, and regulations that affect business and industry. However, the topic of deregulation is best understood by first understanding the purposes and effects of regulations.

Regulation

It is often thought that individual firms lack the perspective and/or the incentive to protect society. Consequently, the regulation of business and industry by government is for the purposes of consumer protection and or the enhancement of business competition. Regulation is generally thought to also protect minorities, employees, investors, and the environment.

The railroad industry was one of the first industries that the federal government targeted. As a result, the Interstate Commerce Act was passed in 1887. As such, the Interstate Commerce Act created the first regulatory body in the United States—the Interstate Commerce Commission, which still regulates transportation rates, as well as establishes rules and regulations for interstate commerce...