How Regulation Protects Established Firms

by Peter G. Klein

In various talks (long and short) and articles about big business, I’ve stressed the point that established companies frequently lobby for more regulation, give generously to politicians on all sides, and benefit from an environment in which government plays a large role in the economy. Regulation makes many firms larger and more bureaucratic than they would otherwise be. Murray Rothbard, building on earlier scholars such as Gabriel Kolko, made this a major theme of his work on the history of regulation.

It’s nice to hear the argument that regulation helps large, politically connected firms from the horse’s mouth — that is, from one of the regulated firms. And in the US there’s no bigger horse than Goldman Sachs, which is so closely tied to Washington, DC that it’s practically a fourth branch of the US government. Here’s Goldman’s CEO Lloyd Blankfein from a 2015 interview:

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