The Dangers of Ignoring the Compound Effects of Regulation from "summary" of Economics in One Lesson by Henry Hazlitt
Regulation is often viewed as a solution to specific problems in the economy. It is seen as a way to correct market failures, protect consumers, or ensure fair competition. However, what is often overlooked is the long-term impact of regulation and the compound effects that can result from seemingly well-intentioned policies. When regulators intervene in the market, they disrupt the natural order of supply and demand. This interference can lead to unintended consequences that cascade through the economy over time. Each new regulation adds to the existing web of rules and restrictions, creating a tangle of constraints that can stifle innovation and hinder economic growth. Moreover, the costs of regulation are not always immediately apparent. While a single regulation may seem insignificant on...
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