The businesses subject to regulation have a huge financial incentive to essentially “capture” the regulatory process. Meanwhile, the do-gooders who gave us the regulation and its bureaucracy are on to the next crusade. From Charles Hugh Smith at oftwominds.com:
All this grift, graft, predatory pricing, price-fixing and parasitic monopolizing costs the public and the economy dearly.
In the great scheme of civilization, governments arose to consolidate resources, wealth and power, and protect these scarce and valuable assets from outsiders. Outsiders included invading hordes, competing states and self-serving entities within the realm guided by one goal: to maximize private gain by any means available.
In the past, these entities included petty fiefdoms, warlords and brigands. In the present, corporations are the entities guided by one goal: to maximize their private gain by any means available. This pathological drive to profiteer, exploit and pillage goes by the polite term “increasing shareholder value.” (I’m sure the warlords and brigands would be jealous of the modern-day PR machinery wielded by corporations.)
The powerful central state is both a threat to warlords / corporations and a potentially unmatchable ally. Should the warlord / corporation worm their way into the good graces of the state via bribes, gifts and other blandishments, then the state can legalize and enforce whatever predatory mechanisms they’ve established to fleece the public of their hard-earned wages.
In the modern iteration of warlord predation, this harnessing of the state to maximize private gains is called regulatory capture. In the old days, petty fiefdoms and warlords bought state protection by funneling a share of their profits to the monarch. (Brigands converted themselves from outlaws to respected warlords by the same path.)
