Steven Horwitz has a post on the FreemanOnline that is just excellent. It makes the point that a market unregulated by the government is not necessarily an “unregulated market” in the sense that nothing governs how it behaves. Rather a market unregulated by the government will then be regulated by the rules of supply and demand. It will be regulated by the constant push and pull of the market and competition. In such a market, companies have to respond to consumer demand or they go out of business. Such an incentive will sharpen the mind. In a government-regulated market it is a small group of people who are making the rules. Their incentives may not align with ours, then what? Even if they have the best of motives, they cannot possibly have as much knowledge about the market as the market itself has – how can they possibly write rules that will make the market function better? The odds are against them – and so is history.
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