I'm in the process of reading _Why Nation Fails_. The central thesis is that the rich and poor countries are separated by inclusive vs extractive institutions. The extractive institutions are characterised by elites that attempt to defend their own wealth and status by maintaining the status quo and resisting the creative destruction that may threaten that position.
It seems to resonate a bit here, when Marc speaks of things like regulatory capture. I heard a few years back that a US health insurance startup had to provide on the order of 6000 pages of documentation to be approved. No wonder that there hadn't been another provider for twenty years or so. It seems like some things are hard to build mostly because some people want it that way.
I can't help but think that there's a fundamental flaw in the American regulatory approach. From the European perspective, the US is sometimes viewed as some time of free market haven, but in practice it often turns out that the regulatory burden is much higher. The framework imposed on financial markets by the SEC and related authorities is on a whole different level in the US, and with higher complexity you a also get a larger surface area for special interests to make their mark.
Point being, why not write simpler laws and regulations and leave it to the courts to interpret what adheres to the spirit of it? With the barriers of entry gone, I think we'd see a renewed vitality to many ossified sectors.
It seems to resonate a bit here, when Marc speaks of things like regulatory capture. I heard a few years back that a US health insurance startup had to provide on the order of 6000 pages of documentation to be approved. No wonder that there hadn't been another provider for twenty years or so. It seems like some things are hard to build mostly because some people want it that way.
I can't help but think that there's a fundamental flaw in the American regulatory approach. From the European perspective, the US is sometimes viewed as some time of free market haven, but in practice it often turns out that the regulatory burden is much higher. The framework imposed on financial markets by the SEC and related authorities is on a whole different level in the US, and with higher complexity you a also get a larger surface area for special interests to make their mark.
Point being, why not write simpler laws and regulations and leave it to the courts to interpret what adheres to the spirit of it? With the barriers of entry gone, I think we'd see a renewed vitality to many ossified sectors.