Comment by intended
7 hours ago
Yes.
This is always going to be the case, because regulation is typically a form of friction.
It is the shape of regulation that matters, and ideology on either side of the divide is religion.
Good regulation and regulators would punish anti competitive behavior, but this will also act as a drag on firms, while preventing firms from reaching certain sizes and potential economies of scale.
The point is that regulation deserves to be understood and crafted well.
Those economies of scale are meaningless to consumers if it means a single firm squeezes everyone in the supply chain and captures the benefit for itself.
This is also a specific weakness in American conversations. The divide between free markets, competition, and regulation are ideological.
If you want good markets you need good regulation and incentive structuring.
> If you want good markets you need good regulation and incentive structuring.
Actually, in the real world, the worst markets are also the strongest regulated: housing, education and health care.
Meanwhile the fields that got to be regulated last brought us the most wealth, advances and innovation: high tech & software.
> Actually, in the real world, the worst markets are also the strongest regulated: housing, education and health care.
> Meanwhile the fields that got to be regulated last brought us the most wealth, advances and innovation: high tech & software.
Financial markets are highly regulated. They are one of the most structured markets out there.
The outcomes in all those markets, whether they are good or bad, is a direct result of how the markets are structured.
The 2008 financial crisis, for example, was a direct result of regulators being defanged and underfunded for multiple years.
If you look at technology: innovation amazing in the era of unlimited horizons, the era of "move fast and break things."
However, the cost of externalities from inventions like social media, were not captured in that market structure. This means that firms can absolutely pollute or addict people in the information economy, capturing the profit but socializing the costs.
The ability of dominant players to consume/acquihire upstarts and keep their market position, is a drag on innovation and consumer outcomes today.
The situation that was faced in the early days of a new technology is different than what is faced in its maturity, when the advantages of the nimble upstart give way to the massive overlord.
At each stage, you have to craft the incentives and rules to ensure you achieve the outcomes you (as a nation) actually priortize.