Scott Ganz gives comfort to the undeserving when he gives "regulation" the credit for any number of social goods. He's on the right track, but there's something missing.
For starters, what does he mean by "regulation"? The term can be used over an immense range, so much so that justification of it must be qualified. That is the fundamental disagreement I have with Scott's post - if "regulation" itself is good, it partially disarms critics of particular implementations. Likewise if it is bad, then it is that much harder to implement when it might become necessary. So everyone must insist that it remain a neutral term that is insufficient without qualification.
Scott's usage appeared to be in the broadest possible sense. OK. But in the broadest possible sense, the only regulation we have is ethics. For practical regulation, we have to deal with particulars.
Also, I would have emphasized that any system of regulation depends on compliance. In all but the narrowest situations, there simply aren't enough inspectors to go around, and if there were, it would be intolerable (picture everyone getting their income tax returns audited every year). That's why oppressive govts must fall - ultimately they can't carry their own weight.
So how do you ensure compliance? For one, make sure that the regulations themselves are just, and aren't corrupted by such notions as redistribution or an anti-corporate mentality. Strive to make them as light and unobtrusive as possible consistent with their mission. Be willing to revise them in the light of experience regardless of what lobbyists say. Avoid govt involvement for anything other than enforcement. And enforce regulations promptly and evenhandedly without turning everything into a media circus or inviting partisan objections.
But most important of all, emphasize and honor ethics. This is the only regulatory mechanism which can prevent problems, whether caused by the regulated or the regulators. If you simply won't knowingly harm or cheat your customers, constituents or other citizens, that will take care of most problems, and will do so more effectly and cheaply than any other means.
So the real root problem here is about ethics. How do we promote ethics?
We had a big opportunity about 4 years ago...