Excerpt of the Day – on Regulation

From the introduction to Part II, Regulation by Market Forces Outperforms Government Regulation:

I suggest that the reader put aside now forever the idea of “unregulated free markets.”  The conception is fundamentally misleading.  In free markets each participant’s actions are tightly regulated by the property rights of others and the freedom the parties have not to deal with each other.

Our choice is not between government regulation and no regulation; our choice is between regulation by centrally planned, static dictates of government and regulation by decentralized, dynamic market forces.  It is between regulation handed down by a few authorities with power to coerce, and regulation emerging bottom-up from the choices of market participants, none of whom may impose his will on others.  It is between regulation by the edicts of monopoly agencies immune from profit and loss, and regulation by the choices of consumers and businesspeople, all of whom are subject to profit and loss, as are the standards of behavior they follow.

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