Editor's Corner: Regulating the Market

• Date: 01 June 2016
• DOI: http://doi.org/10.1111/ablj.12076
• Published date: 01 June 2016

Editor’s Corner: Regulating the

Market

Robert Sprague

Recent scandals—for example, Volkswagen accused of manipulating

emissions software

1

—and controversies—for example, Turing Pharma-

ceuticals raising the price of a drug from $13.50 per pill to $750 per

pill

2

—have heightened attention toward regulation. Milton Friedman

claimed that the need for regulation should be tempered by

competition:

Neo-liberalism . . . seek[s] to use competition among producers to protect

consumers from exploitation, competition among employers to protect

workers and owners of property, and competition among consumers to pro-

tect the enterprises themselves. The state would police the system, establish

conditions favorable to competition and prevent monopoly, provide a stable

monetary framework, and relieve acute misery and distress. The citizens

would be protected against the state by the existence of a free private mar-

ket; and against one another by the preservation of competition.

3

In other words, except in limited circumstances, the market is fully

capable of protecting consumers from improper conduct by firms.

1

See generally Russell Hotten, Volkswagen: The Scandal Explained, BBC NEWS (Dec. 10, 2015),

http://www.bbc.com/news/business-34324772. But see We Have Let Down Customers, VW CEO

Interviewed at Detroit Auto Show, NPR (Jan. 13, 2016, 1:51 PM), http://www.npr.org/2016/01/

11/462627096/we-have-let-down-customers-vw-ceo-mueller-at-detroit-auto-show (transcript

of interview in which Volkswagen CEO Matthias Mueller denies lying to EPA regulators,

categorizing Volkswagen’s test irregularities as a misinterpretation of U.S. law).

2

See Andrew Pollack, Drug Goes From $13.50 a Tablet to $750, Overnight, N.Y. TIMES (Sept.

30, 2015), http://www.nytimes.com/2015/09/21/business/a-huge-overnight-increase-in-a-

drugs-price-raises-protests.html.

3

Milton Friedman, Neo-Liberalism and Its Prospects,FARMAND, Feb. 17, 1951, at 89, at *3,

http://0055d26.netsolhost.com/friedman/pdfs/other_commentary/Farmand.02.17.1951.pdf.

V

C2016 The Author

American Business Law Journal V

C2016 Academy of Legal Studies in Business

199

American Business Law Journal

Volume 53, Issue 2, 199–202, Summer 2016

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