> Competition is an essential component of effective regulation, for two reasons: First, competition keeps the companies within a sector from all telling the same lie to its regulators.
I'm as pro-competition as anybody, but I don't actually buy this argument.
Firstly, regulating a thousand small players is much harder than regulating a few. Which is why there is a lot of evidence that regulation (even when good or needed) eliminates some amount of competition - crash and emission testing put an end to new car manufacturers for a long time.
Secondly, in industries with lots of competition and individual actors (real estate, healthcare, finance, etc) regulatory capture is actually far worse! Increasing the sheer number of special interests does not, in fact, improve regulation. And if anything, smearing it across as many voting districts as possible gives a level of political entrenchment that software companies could only dream of.
Let me flip the Airbnb argument on its head - why are hotels allowed to build dense dormitory-style housing in cities where it's otherwise illegal to do so? Because their regulatory capture is so entrenched that we don't even think about it.
I'm as pro-competition as anybody, but I don't actually buy this argument.
Firstly, regulating a thousand small players is much harder than regulating a few. Which is why there is a lot of evidence that regulation (even when good or needed) eliminates some amount of competition - crash and emission testing put an end to new car manufacturers for a long time.
Secondly, in industries with lots of competition and individual actors (real estate, healthcare, finance, etc) regulatory capture is actually far worse! Increasing the sheer number of special interests does not, in fact, improve regulation. And if anything, smearing it across as many voting districts as possible gives a level of political entrenchment that software companies could only dream of.
Let me flip the Airbnb argument on its head - why are hotels allowed to build dense dormitory-style housing in cities where it's otherwise illegal to do so? Because their regulatory capture is so entrenched that we don't even think about it.