Regulation vs. Innovation

AEI’s James Pethokoukis has a nice little blog post on the negative effects of ill-conceived regulation:

So I very much liked a Mercatus study last year finding US economic growth has been slowed by an average 0.8% per year since 1980 due to the cumulative effects of regulation. Also a favorite of mine: A 2013 study from economists John Dawson of Appalachian State University and John Seater of North Carolina State University, Federal Regulation and Aggregate Economic Growth, that estimates the past 50 years of federal regulations have reduced real GDP by roughly two percentage points a year, or nearly $40 trillion. Both studies show pretty sizable effects from smarter regulation or deregulation.

He points to new articles at Reason and National Affairs demonstrating that the Federal Communications Commission limited tech advancement, including cell phones. As economist Thomas Winslow Hazlett writes in his Reason piece,

Image result for cell phoneWhen AT&T wanted to start developing cellular in 1947, the FCC rejected the idea, believing that spectrum could be best used by other services that were not “in the nature of convenience or luxury.”…  A child conceived at the same time as cellular would have been 37 years old by the time the first commercial cellphone—Gordon Gecko’s $3,995 Motorola DynaTAC 8000X brick—was released onto the market. Once the blockage was cleared, progress popped. Soon, the science fiction vision of the Star Trek communicator was reality.

Check them out.