Consider the transaction costs of figuring out which university is actually the best for you. They are high. Transaction costs are high in almost every market.

Consider the transaction costs of figuring out which university is actually the best for you. They are high. Transaction costs are high in almost every market. Go to the supermarket. There are 10 brands of raspberry jam. Huzzah! The free market's competition at work! How much time are you willing to spend figuring out which of the 10 brands is the best for you? The free market model assumes a variety of unrealistic conditions between buyers and sellers. The idea is that reality is close enough that the models still work. When the models don't work, instead of questioning the wisdom of the soothsayers and keepers of the economy, the economy itself is blamed. > It used to be that goods and services would compete on price and quality. If someone could offer the same quality for less, buyers would go there. It was self regulating to some point: predation was limited by the system I don't think this was ever true. So many cultures across all time periods have complained about charlatans and cheats, robber barons and the greedy rich. A lot of people think regulations exist because people are sour and can't handle being losers in the free market, or something. If you trust peoples' sense of fairness then the more likely scenario is that people have been getting cheated for a long time. Why are regulations so ineffective? Intelligence is like water. If it flows towards some goal, it will flow around all obstacles to get there. Regulations are like trying to dam a river by putting a giant concrete block in the middle of it. It could work, but only if you're far, far smarter than the collective human intelligence you're trying to control. No one is, though. So every generation sees a new set of regulations, a new form of economic institutions, and a new nervous illusion of stability that will eventually give way to crisis and a new ideology of regulations and economic institutions. It should come as no surprise that an adversarial system whose purpose is to allocate economic and political power leads to such abusive behavior.