The ideological debate over regulation misses the point: it’s not a question of more or less, but of good regulatory designs.
Regulation” and its counterpart “deregulation” are dull words that have evoked the kind of passionate political fury since the days of Reagan and Thatcher one would normally associate with religious conflict and war. The dogmatic rhetoric of scorn and disdain with which each side of the “regulation” battle characterizes the other produces a painfully oversimplified view of the issue. All of this ruckus would be comical were it not so counterproductive. On one side of the debate, any expansion of the wasteful public sector or any brake on the engine of free enterprise is a deadly sin antithetical to individual liberty. On the other side, the nefarious machinations of greedy capitalists must be restrained at all costs lest we suffer a wholesale McDonaldization of society under plutocratic rule.
But we have to look past the unidimensional caricature of the debate - more regulation versus more market - and beyond the monolithic abstraction of these ideas including that of neoliberalism, social democracy, and the so-called “Third Way.” Instead, we have to think very tactically and ask: for each specific area of economic activity, what is the most appropriate regulatory design?
The case of the London bus system is an instructive example. The fact of the London bus system is that it basically works fine. Depending on one’s level of cynicism, this fact alone may not seem impressive. But consider the perfect storm of complicating factors: the general population of London and London bus use have been growing rapidly.