Why Big Business Loves Regulation

“Big business is often the chief lobbyist for, and the primary beneficiary of, government regulation. The media typically do not notice this, while big corporate executives and bureaucrats obscure their partnership, leaving the taxpayer, the consumer, the worker, and the entrepreneur in the dark about how big government and big business are ripping them off through regulation….

“Politicians and bureaucrats often portray these regulations as tools for restraining business in order to protect workers, consumers, the environment, or fair competition. Taking their word for it, the media tend to depict any debate about regulation as a battle pitting the government against big business, with big business asking to be left alone.

“The truth is quite different. George Stigler, who won the Nobel Prize for economics in 1982, laid out the true story clearly and convincingly in a 1971 essay. ‘Regulation,’ wrote Stigler, ‘is acquired by the industry and is designed and operated primarily for its benefit’”….

“Regulation adds to the basic cost of doing business, thus heightening barriers to entry and reducing the number of competitors. Thinning out the competition allows surviving firms to charge higher prices to customers and demand lower prices from suppliers. Overall, regulation adds to overhead and is a net boon to those who can afford it — big business.” — Timothy Carney, The Big Ripoff: How Big Business and Big Government Steal Your Money (New York: John Wiley and Sons, 2006), 107.

As a tease, two chapter titles from this book are: “The War Against Tobacco: Why Phillip Morris is Leading It” and “Environmentalism for Profit: How Bad Environmentalist Laws Give Your Money to Big Business.”

Doug Jones