TCS Daily on June 18 ran an essay by me on regulatory policy. I excerpt thus:
In a sense, both models – market and regulatory — are flawed. But there is a difference. For every theory contending that markets fail, there is usually an answering argument that they tend to self-correct. Once, economic theory worried that markets would fail to fund “public goods” like lighthouses—until more careful economics revealed markets doing exactly that. More theory pointed to the evils of monopoly. But in reality a monopolist reaping substantial profits is a big target, with every entrepreneur looking for a substitute good or service. Many of the markets’ self-correcting mechanisms are simple Darwinism. Poor investors and badly run businesses lose (their own) money until they go under. Technology and other factors that bring change keep even established firms on their toes.
In contrast, self-correction is not a common response to regulatory failures. There is no good explanation for how an agency or a system of rules can be designed to systematically succeed or self-correct.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.