Why Excess Regulation?

Our world consists of many coupled evolving systems, including systems of competing species, nations, political parties, firms, cultures, charities, and even academics. These systems vary in many ways, but a key difference is in their adaption power - how fast can each one search to find and adopt more adaptive alternatives.

If the strength of influence between such systems were symmetric, then systems with stronger adaption power would tend to tame and drive the weaker ones. This would promote overall adaption of our total system, and we’d want to increase the influence of strong systems over weak.

However, in our world today we often see governance and regulatory systems, which are weak adapters, having big and asymmetric influence over strong adapters like capitalism, with the reverse influence being much weaker. In fact, we often actively suppress reverse influence as illicit “corruption” or “conspiracies”.

In general, having weak adaptation systems tame and drive strong ones seems bad for overall system adaption. However, might our specific case be an exception to this general rule?

Historically war has rewarded large scale coordination, which has selected for the social unit of empires, which tax and draft from smaller communities, and resist reverse attempts to interfere with their abilities to prosecute wars. In addition, the effectiveness of law in suppressing destructive conflict has selected for legal systems which can settle legal disputes without being overly influenced by legal disputants. These may plausibly explain why we have weak adaption governments that asymmetrically influence strong adaption systems like capitalism.

More recently, empires found that they could get stronger local support for wars by merging local cultures into national cultures, and this required them to get more involved in shaping and regulating culture. And then people in national cultures became much more interested in using government to regulate each others’ behaviors. Since forager times, that’s what people who strongly feel part of the same community tend to do to each other.

And that’s my view of the status of regulation today. Government regulation is mostly justified in our world as fixing local problems, much like foragers who meddled in their local social worlds to fix what they saw as local problems. Debates about regulation almost never mention the harms of letting weak adaptive systems drive strong ones, and most specific regulations seems to me maladaptive, relative to the private alternatives that would likely arise in their absence.

So regulation likely exists as a result of prior strong selection pressures to create central governments to prosecute big wars, and to create law and national cultures to support them. Excess regulation is a side effect of making such asymmetric powers.