Volume 11, No. 2 (2008)
Entrepreneurs exploit market opportunities and innovate to achieve or maintain strategic advantage over their competitors.In the absence of government regulation, entrepreneurs are free to focus on improving satisfaction of customer wants, for example, by enhancing current goods, supplying new goods, or supplying established goods at lower cost. In a regulated market, entrepreneurs focus on satisfying regulatory authorities, for example, to earn rate increases, subsidies, or tax benefits. Economists normally conceptualize regulation as restricting entrepreneurial choice over prices charged, including general prohibitions against price discrimination, or as imposing additional costs on business enterprises through mandating actions entrepreneurial planners would not otherwise have chosen, or prohibiting actions which would have been freely chosen. This paper examines the role of a specific regulatory agency, the Federal Maritime Commission, and its regulatory oversight of the maritime shipping sector. Business strategy and public policy implications will be developed, as well as implications for the growth and development of the shipping industry. the history and nature of government intervention in the maritime sector will be reviewed. The presence of a regulatory authority at least partly substitutes a kind of bureaucratic sovereignty over the consumer sovereignty of an unregulated market. Regulated firms compete for favors from the regulatory authority, and in a regulated environment strategic advantage is directed away from entrepreneurial planners to political entrepreneurs.
