In Munn v. Illinois the Supreme Court established the legal basis for state regulation by recognizing that certain economic activities were so critical to the functioning of a modern society that government has the right to oversee the prices charged to assure that such services are provided to the public in a reasonable manner. Yet the Court‘s decision in Munn did not adopt a particular process for establishing the prices that could be charged by those entities deemed to be critical to the modern society (often we call these entities ―utilities‖). Indeed, it was not until the early 20th century that the commission-based regulation of public utilities that is so prevalent today was implemented. Regulation of private entities by expert commissions was something new and there were no ―text books‖ to turn to for guidance. The process of regulation involved much trial and error and experimentation. For instance, the development of the uniform system of accounts, procedural due process, and economic and administrative theory all evolved concurrently to establish what has become the modern regulatory system (Covaleksi
In Munn v. Illinois the Supreme Court established the legal basis for state regulation by recognizing that certain economic activities were so critical to the functioning of a modern society that government has the right to oversee the prices charged to assure that such services are provided to the public in a reasonable manner. Yet the Court‘s decision in Munn did not adopt a particular process for establishing the prices that could be charged by those entities deemed to be critical to the modern society (often we call these entities ―utilities‖). Indeed, it was not until the early 20th century that the commission-based regulation of public utilities that is so prevalent today was implemented. Regulation of private entities by expert commissions was something new and there were no ―text books‖ to turn to for guidance. The process of regulation involved much trial and error and experimentation. For instance, the development of the uniform system of accounts, procedural due process, and economic and administrative theory all evolved concurrently to establish what has become the modern regulatory system (Covaleksi