The view that all government should do in the economic realm was to establish property rights and enforce contracts was never true. Smart governments always did much, much more. (Dumb governments did much, much more too.) Indeed, it is only with proper regulation that a market can fulfill its appropriate social role as a consumer surplus-generating mechanism: Diane Coyle: Three Cheers for Regulation: "One of the striking changes any rich-world traveler to low-income countries cannot fail to have missed during the past decade or so is the rapid spread of mobile phone use...

...followed now by expanding mobile Internet access. Mobile communications are playing the same role in social and economic development in Africa, Asia, and Latin America that the spread of fixed-line communications did in countries like France and the United Kingdom in the 1970s. Family and social connections, as well as business and educational opportunities, are being transformed. A key contributor to this technological transformation was a mandatory EU technical standard enforced in 1987. The regulation created a continent-wide market for hardware and services, one large enough that the standard–called GSM, after the Groupe Spécial Mobile committee that had codified it–was adopted globally.... There are in fact three important channels through which regulation can benefit an economy. One is the market-creating and market-growing role illustrated by the GSM standard.... This is a powerful dynamic. It explains why British businesses are increasingly appalled by the prospect that the UK government will not deliver continuing post-Brexit regulatory alignment with the EU.... Regulation can also benefit an economy by enabling competition.... The third way in which regulation is good for an economy is precisely in its protection of consumers...


#shouldread

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