Deregulation facts for kids

Deregulation is when a government removes or reduces rules and laws, usually to help the economy. Think of it as taking away some of the rules that control how businesses operate. This is the opposite of regulation, which means adding rules. Deregulation became very popular in many countries during the 1970s and 1980s because new ideas about how economies work became popular.

Before this, especially during a time called the Gilded Age (roughly 1870s-1900s) and the Progressive Era (early 1900s), many people believed that rules were important. They thought rules were needed to make sure companies treated their workers fairly and did not abuse labor laws.

What is Deregulation?

Deregulation means taking away or making government rules less strict. These rules often control businesses and industries. The main goal is usually to make the economy grow faster.

Why Governments Deregulate

Governments often deregulate for several reasons:

• To encourage competition: When there are fewer rules, new businesses can enter the market more easily. This can lead to more choices and better prices for customers.
• To boost economic growth: Some people believe that too many rules can slow down businesses. By removing rules, companies might find it easier to invest, create jobs, and innovate.
• To lower prices: With more competition, businesses might lower their prices to attract customers.
• To increase efficiency: Without strict rules, companies might find new, more efficient ways to operate.

Examples of Deregulation

Deregulation has happened in many different areas. For example, in some countries, rules about airlines, phone companies, or even banks have been changed.

• Airlines: Before deregulation, governments often controlled airline routes and ticket prices. After deregulation, airlines could fly where they wanted and set their own prices. This led to more flights and often cheaper tickets.
• Telecommunications: In the past, one big company often controlled all phone services. Deregulation allowed many different phone companies to compete, leading to more options like mobile phones and the internet.
• Postal Services: Some countries have deregulated their postal services. This means that different companies can deliver mail, not just the government postal service.

When Did Deregulation Become Popular?

Deregulation became a big idea in the 1970s and 1980s. Many leaders, like Margaret Thatcher in the United Kingdom and Ronald Reagan in the United States, believed that less government control would make their economies stronger. They thought that businesses would do better if they had more freedom.

Historical Context of Regulation

Before the push for deregulation, many countries had a lot of government rules. For example, during the Gilded Age in the United States, there were concerns about big businesses becoming too powerful. People worried that these companies might not treat workers fairly or might create monopolies (where one company controls everything).

The Progressive Era followed the Gilded Age. During this time, many new laws were created to protect workers, consumers, and the environment. These laws were seen as important to make sure companies did not abuse labor laws or harm the public. Deregulation was a shift away from this way of thinking, aiming to reduce the government's role in the economy.

Images for kids

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  As a result of deregulation, Orange operates France Telecom-branded phone booths in Wellington, New Zealand.

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  Since the deregulation of the postal sector, different postal operators can install mail collection boxes in New Zealand's streets.

See also

In Spanish: Desregulación para niños