Regulatory Capture

By Deane Barker

This is a phenomenon where companies “capture” the regulations used to govern them. They do this by installing “friends” in public service positions (sometimes temporarily) to get laws or regulations rolled back.

This process is informally known as the “revolving door” – business people from the private sector “rotate through” government in order to get laws changed, then go right back to the private sector, now under more favorable rules.

In an article entitled “Regulatory Capture: Beyond Revolving Doors and Against Regulatory Nihilism,” Cory Doctorow uses the example of Ajit Pai, who was a Verizon executive nominated by Donald Trump to run the Federal Communications Commission. Pai’s signature achievement was the elimination of net neutrality (which communications companies hated), at which point he returned to the private sector to profit from the rule change he spearheaded.

The Wikipedia page for the topic has over a dozen other examples.

Why I Looked It Up

I read about the “revolving door” in another book, in the context of the Obama administration (it might have been The Death of the Liberal Class, but I honestly don’t remember).

Then, in Superhubs: How the Financial Elite and their Networks Rule Our World, I was introduced to the term. There’s an entire chapter on the phenomenon.

Then I found and read Doctorow’s article (linked above).

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