Obvious parallel with food trucks versus bricks and mortar restaurants. Funnily enough, I see pro-free-market candidates (funded by commercial property owners and restaurant owners) suddenly talking about regulations when their slice of the pie is threatened.
If you're a fixed restaurant and you have the opportunity to start a food truck in addition to your established restaurant, then fair's fair.
One important item discussed in the parable was the "slush fund", and how it succeeded in influencing the city council. This is the most corrosive aspect.
About 35 years ago the FBI's Abscam[1] public corruption investigation and sting operation brought down quite a few people, including Congressmen. My favorite excuse was from the Congressman videotaped stuffing cash into his pockets, and who later claimed he "was only pretending to be involved with the bribery" and "was conducting his own operation dealing with corruption and that the FBI was ruining his own investigation".
IIRC Congress was so upset about being caught taking bribes that they actually cut the FBI budget the following year!
Public corruption needs to be investigated and prosecuted more often.
The only reason we don't have more actual stories similar to this is we don't know the inside scoop on what happens. We aren't a fly on the wall for such meetings.
It's a fairly broad representation of what has happened in thousands of cities and thousands of industries in the past. The lobbying, the promise of self-regulation, the meagre efforts to improve, etc - anytime you see mention of any aspect of this, you can reasonably assume what's gone down. Self-interest is a powerful force.
I was about to make this comparison when I realized that (at least in SF) it's more apt to think of Airbnb as the result of overregulation of the monthly rental housing market. Those laws, rather than helping the tenants they were designed to protect, have pushed landlords to enter a different market. At public hearings, I've seen very few representatives from the hospitality industry and far more from tenant groups and apartment associations.
If I had to guess, I think hotels are less concerned about Airbnb because, while they both belong to the same market, they each have slightly different niches to serve and demand in the market is already high.
I was going to say something about Uber and traditional taxis in the same vein.
But then I was also going to say something about doctors, lawyers, and other professionals that form some kind of barrier around themselves... being someone who is in one of those groups.
the further I take this down the road(no pun intended), the more perplexed I find myself.
Me too, the question mark in my post is real. Although regulatory capture is a problem, it's rather easy to use that as justification for the idea that any regulation is simply a boondoggle and exists for no other reason than to hinder the economy.
but the actual definition of regulatory capture is that regardless of the reason regulation exists (which usually is a real reason, not an invented one as in the article - the article doesn't have regulation resulting from anything any member of the public actually objected to), the regulating bodies will be captured. So take a real reason: let's say we (the public) want to improve Comcast's level of (notoriously bad) service, even in areas where they happen to be a sole provider. So how do we do this - we can only do it through some regulating body. So, okay, let's improve Comcast's atrocious service. The idea of regulatory capture is even though we have a great reason to do this, Comcast can still capture that body, and be better-off than before the regulator existed - at the expense of the public. Which is why we don't do it!
But the general argument applies to all regulation, yet we still have regulation. And Comcast's business was literally created by regulation: it is a municipal monopoly.
Your argument needs more nuance. Regulatory capture happens when no one in the general public is organized or invested enough to be part of the lobbying pool, or generally due to attrition caused by government corruption.
TL;DR of the parable. Incumbent businesses will lobby and use professionalism as an excuse against individuals using their own resources to do ad-hoc business. Article makes an argument that this is bad.
I found this article as print out on the floor of a bathroom on an equities trading floor of Goldman Sachs circa 2010. It intrigued me and since then I have shared it with my friends and family, who seemed to have enjoyed it. I post it now because it reminds me of the arguments surrounding new car hailing services and on demand short term housing rentals. Our problems aren't entirely new, so why not leverage some wisdom of decades past when reasoning about them?
Interesting to see that this is a thing people have talked about before. I've thought of this as being obvious for a long time and brought it up often.
Personally I've found a sort of class divide in how people respond to the arguments.
Working class people can generally easily see how the regulations work against them.
Take taxis as the example of the day. Even now, in non-Uber cities, it makes sense for someone with a bit of free time to go ad hoc taxi driver. Glue a taxi sign to your roof and drive about. Except this is illegal, for reasons that are completely irrelevant to you personally.
The middle classes wouldn't be the driver because they don't need to and probably don't have the time anyway. Generally they ignore possible cost savings and think about the tiny chance of meeting a serial killer or whatever.
Loads more things really. Rich countries control commerce to an incredible extent - the free market is a complete and utter fantasy. Something as banal as baking cakes and selling them to passers by is illegal, presumably because way back when big businesses were cutting their flour and sugar with chalk.
In a vague sense, almost every low barrier to entry market has been made illegal. No street sales is really quite odd.
As a thought experiment, in an environment where for-profit entities
will tend to try to increase their profits, consider: in what cases
is it appropriate for governments to interfere with economic activities?
Interview arguing insider trading should be legal: http://capitalismmagazine.com/2004/09/legalize-insider-tradi...