Jenkins on Regulatory Capture & Its Impact on Progress

by on February 2, 2011 · 3 comments

I absolutely loved this quote about the dangers of regulatory capture from Holman Jenkins in today’s Wall Street Journal in a story (“Let’s Restart the Green Revolution“) about how misguided agricultural / environmental policies are hurting consumers:

When some hear the word “regulation,” they imagine government rushing to the defense of consumers. In the real world, government serves up regulation to those who ask for it, which usually means organized interests seeking to block a competitive threat. This insight, by the way, originated with the left, with historians who went back and reconstructed how railroads in the U.S. concocted federal regulation to protect themselves from price competition. We should also notice that an astonishingly large part of the world has experienced an astonishing degree of stagnation for an astonishingly long time for exactly such reasons.

I’ve just added it to my growing compendium of notable quotations about regulatory capture.  It’s essential that we not ignore how — despite the very best of intentions –  regulation often has unintended and profoundly anti-consumer / anti-innovation consequences.

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  • John

    I have no problem with bioengineered produce, but Holman’s piece is quite disrespectful of property rights. If a large bioengineered alfalfa grower is polluting its neighbors it should either stop or buy them out. Everyone has a right to be protected against trespass, and the Coase theorem doesn’t mean “Big, important companies can do whatever they want.”

    He might be right that USDA regulation is the wrong route; I don’t know. But I hope the courts don’t buy into his line of reasoning when the small farmers drag their neighbors into court.

  • John

    I have no problem with bioengineered produce, but Holman’s piece is quite disrespectful of property rights. If a large bioengineered alfalfa grower is polluting its neighbors it should either stop or buy them out. Everyone has a right to be protected against trespass, and the Coase theorem doesn’t mean “Big, important companies can do whatever they want.”

    He might be right that USDA regulation is the wrong route; I don’t know. But I hope the courts don’t buy into his line of reasoning when the small farmers drag their neighbors into court.

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