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Guest Author Baleigh Scott wrote this article to convince people that, principally, “government is the disease for which it claims to be the cure.” In order to inform her blogged opinions (The Indisputable Dirt), this Public Policy Analyst reads political editorials and classical literature. Her background is in Economics and Creative Non-fiction, so her writing is directed to an interest in Money and Story-telling. The welfare state is her perfect subject. Enjoy.

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If the wall is strong enough to restrict big businesses within, it is most certainly strong enough to keep smaller, not-yet-in-existence businesses out.

When I mention the dangers of regulating business (as I do incessantly)— of giving a panel of flawed human beings the power to create and enforce arbitrary rules and standards within an industry— people tend to assume that I’m going to focus, not on “proper” regulation, but on its evidently corrupted human manifestation.

The expected argument goes something like this:

We can’t expect people, including regulators, not to act in their own self-interest. If we grant government agencies the special power to regulate businesses, the biggest and most powerful businesses will inevitably find ways to use their wealth to influence those regulatory agencies. In one way or another, the given regulatory agency will become no more than a puppet for the industry’s big wigs. As a result, the very agencies designed to prevent huge companies from using their size and influence— at others’ expense— will end up granting the wealthiest companies more power and freedom than the free market ever could. Thus, if our goal is to curb the power of big businesses, we’d be better off without the regulatory agencies in the first place.”

There is a lot of truth to this.

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I remember sitting in my Principles of Economics class my freshman semester when my professor asked, “What role should government play in the economy?” An energetic young student raised her hand and responded with, “Government must break up monopolies.” My professor loved that answer and spent the rest of the class ranting about “market failures” such as the creation of powerful monopolies. I left class that afternoon and went to the Student Center where I grabbed a sandwich that left me with a bad taste in my mouth – it was overpriced and flavorless.  Just then, I had my light bulb moment. If every on-campus dining facility is owned by the same company, and there is zero competition, am I living amidst a food monopoly? An hour earlier my professor taught me that if this truly was a monopoly, I was the victim of a free market failure. But was the free market even at play here or did the university purposely crowd out market competition? Let’s explore.

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