Thursday, July 28, 2011

Quote of the Day on Rent Seeking and Regulatory Capture

You think that the predicament of crony capitalism through the unholy stealth relationship between government agencies and big corporations, which results to revolving doors, corruption, regulatory capture and rent-seeking are about ethics or virtues?

It’s not.

Professor Steve Horwitz explains, (bold emphasis mine)

The problem is not regulatory or ethical, but institutional. If you want to change the pattern of outcomes, change the rules. The only possible way to end the corporate control over the state is to reduce the state's sphere of influence down to as little as possible and ideally nothing. As long as there's the dead animal of the state (really: the citizenry) to feed on, the vultures of the private sector will keep showing up to get their share.

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