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Is it a weak regulatory environment, or is it simply one designed to favor industry incumbents and prevent new competitors?

sharemywin 4y ago
probably both.
consumer451 4y ago
The overlap on this Venn diagram is significant.
bediger4000 4y ago
What's the difference? Seriously, how can we tell?
mschuster91 4y ago
The former. A lot of the industries where absurd amounts of profiteering go on (especially retail) have nearly zero regulations - you don't need a license to start up a supermarket. The problem is that the the big stores (Walmart, Amazon, Costco) are too big to compete against: they can afford loss leaders or, hell, even entire loss stores simply to drown the entirety of smaller stores in dozens of miles around them, and on the purchasing side they can demand insane rebates and other terms (e.g. payment schedules >> 30 days) from vendors which makes it fundamentally impossible for smaller stores to get the same terms.
jjoonathan 4y ago
Regulatory capture is the least of the anti-competitive forces running around your typical market. Network effects, two sided markets, vertical and horizontal integration, brand loyalty, M&A, economies of scale, and even the structure of property ownership itself can have major anticompetitive effects. Yes, regulatory capture belongs on the list too -- but as a bit player, not as the prime evil. Some of these forces are things we want to encourage (economies of scale), some of them we probably have to allow, and some of them are pure emergent evil that we have "collectively" decided not to mitigate. Deregulation only address one of these forces. It's not a useless idea, but it gets wildly over-promoted by people who A. can't bring themselves to admit that the free market would ever create emergent bad incentives on its own or B. don't want the government to stop them from exploiting said bad incentives.

sharemywin 4y ago

probably both.

consumer451 4y ago

The overlap on this Venn diagram is significant.

bediger4000 4y ago

What's the difference? Seriously, how can we tell?

mschuster91 4y ago

The former. A lot of the industries where absurd amounts of profiteering go on (especially retail) have nearly zero regulations - you don't need a license to start up a supermarket. The problem is that the the big stores (Walmart, Amazon, Costco) are too big to compete against: they can afford loss leaders or, hell, even entire loss stores simply to drown the entirety of smaller stores in dozens of miles around them, and on the purchasing side they can demand insane rebates and other terms (e.g. payment schedules >> 30 days) from vendors which makes it fundamentally impossible for smaller stores to get the same terms.

jjoonathan 4y ago

Regulatory capture is the least of the anti-competitive forces running around your typical market. Network effects, two sided markets, vertical and horizontal integration, brand loyalty, M&A, economies of scale, and even the structure of property ownership itself can have major anticompetitive effects. Yes, regulatory capture belongs on the list too -- but as a bit player, not as the prime evil. Some of these forces are things we want to encourage (economies of scale), some of them we probably have to allow, and some of them are pure emergent evil that we have "collectively" decided not to mitigate. Deregulation only address one of these forces. It's not a useless idea, but it gets wildly over-promoted by people who A. can't bring themselves to admit that the free market would ever create emergent bad incentives on its own or B. don't want the government to stop them from exploiting said bad incentives.