Two major U.S. Midwestern railroads, the Rock Island Lines and the Milwauke Road, filed for bankruptcy after 1975 and the Court ordered them dismembered. This study explains the economic factors causing financial failure such as total rail line excess capacity in the region leading to low density of freight traffic; in addition, labor union rules required unnecessary large train crews. The regulations of the Interstate Commerce Commission aggravated the economic problems by limiting rail line abandonments and mergers designed to improve efficiency. Congress passed the Staggers Act in 1980 to correct a large part of the regulatory limitations to efficient reorganization of the U.S. rail system, but it was too late to save the Rock Island and the Milwaukee Road.
The later chapters are economic analyses of the more recent mergers of the large railroads from the Mississippi River to the Pacific Coast. A key saving resulted from the court ruling that segments of rail line could be sold to new short-line railroads without the selling carrier having to pay special compensation to rail workers who were discharged. The Illinois Central Railroad was a prime example of a carrier that sold almost all of its branch lines. Great efficiencies in operations were realized as the Union Pacific acquired the Missouri Pacific and the Southern Pacific. Comparable efficiencies were realized by the Burlington Northern acquisitions of the St. Louis-San Francisco and the Atchison, Topeka & Santa Fe.

Legal uncertainty is particularly high in constitutional law, where the Supreme Court may overrule earlier decisions as not conforming to the Constitution. This critical study of constitutional decision-making in the Supreme Court emphasizes the failures of the justices to consider constitutional structure and the original meaning of language in context. Conant criticizes the Supreme Court's opinions supporting racial segregation and the perpetuation of a caste system until the final overruling in "Brown v. Board of Education"; the Court's antitrust exemption of professional baseball; and the recent finding that physical desecration of the flag is protected under freedom of speech.

This study challenges the view of the liberal scholars who argue that the Supreme Court must redefine the Constitution to keep up with the changing times, because this view gives approval for judicial usurpation of the amending power. It also rejects the view of conservative scholars, who contend that the Supreme Court must search for the intent of the framers of the Constitution, on the grounds that subjective intent is impossible to research. There was no verbatim reporter at the 1787 convention, and no such notes were available to the ratifying conventions in the states that rendered the proposed constitution into law in 1789. Following the methodology of Justice Holmes, Conant focuses this work on constitutional purposes and the meaning of language within its total social context at the time of its adoption.

This study uses basic economic analysis as a technique to comment critically on the original meaning and the interpretation of those clauses of the Constitution that have particular bearing on the economy. Many new conclusions are markedly different from those of the Supreme Court and earlier commentators. Conant's view is that the commerce clause and the equal protection clause, if they had been construed consistently with their comprehensive original meanings, would have given much greater federal protection against state laws that impaire free markets. Economic policy for the nation was vested in Congress. To the extent that special interests could buy congressional favor for their anticompetitive activities, free markets were impaired within constraints as interpreted by the court. These decisions have been criticized for their failure to incorporate the antimonopoly tradition in the Ninth Amendment and their failure to recognize equal protection of laws incorporated into the Fifth Amendment. Conant holds that statutory controls of the economy are justifiable in economic theory if they are designed to remedy market failures and thereby increase efficiency. If statutes are passed to interfere with markets and create market inefficiencies for the benefit of special interest groups, they should be condemned under the standards of normative microeconomics. There are four main classes of market failure: monopoly, externalities, public goods, and informational asymmetry. This masterful analysis examines all four reasons for market failure in depth. Litigation costs are analogous to transaction costs. If legal principles and rules are clearly and precisely defined by the Supreme Court when they are first appealed, litigation and its costs should be minimized. Conant claims that if legal principles or rules are uncertain because they lack definable standards, the number of legal actions filed and litigation costs will be much greater. This promotes additional litigation challenging the many statutes enacted to remedy asserted market failures in an expanding industrial economy. This work brilliantly addresses the danger to the economy in court rulings seeking to legislate standards of reasonableness.