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Op-ed Placement

Political Entrepreneurs Are Crowding Out the Entrepreneurs

Originally Published in RealClearMarkets on 10/24/14.

Entrepreneurs launching "disruptive technologies" are reshaping markets across the U.S. economy, often by disintermediation and innovation. While these new products and services provide consumers more choices and better value, regulators have place increased attention on these activities, from car services such as Uber and Lyft, to those offering accommodations like Airbnb, to pop up restaurants running afoul of local health codes. In many instances, these new products emerged because innovators were one step ahead of the regulators. But as the regulatory state grows, these innovators will face new challenges from regulators.

Entrepreneurs and regulators work in different spaces, with completely different views of the world. For the entrepreneur, the world is fast-paced and dynamic. The goal of the entrepreneur is to identify unmet demands in the marketplace and develop the products to meet these demands. This requires innovation, adaptability, and the willingness to take risks. Regulators, on the other hand, live in a static world. By definition, regulation is backward-looking, designed to address purported market failures that have already emerged, focusing on data about past market behavior.