There’s a good reason to fear regulation even if you can imagine beneficial regulation.  You may be suspicious of government agencies’ motives or competence to implement it. Giving power to an agent when we can’t rely on her to use it in a beneficial way is often a bad idea.

But the same kind of fear, viewed through a mirror, often argues in favor of regulation.  Take for example financial regulation.  We may understand that if investors, managers, or insurers could be assumed to act reliably in ways that are consistent with their self-interest then markets would work well and there would be no rationale for regulation.

But should we predicate laissez faire on the assumption that they don’t make mistakes, that they perfectly fathom the complex path to their self-interest?  If we can’t be sure, then giving them the power to do damage is often a bad idea.

(Drawing:  Negative Space from