Chapter 7, Who Protects the Consumer? Summary and Analysis

Critics of capitalism say that the corruption of individual economic agents will lead to deception and fraud being practiced on the customer in terms of shoddy and over-priced products. The Friedmans use the drug industry and the Corvair as evidence. Governments thought they could control abuse through regulatory agencies. Regulation costs money, and, in spite of the money spent, there are shoddy products produced by the regulated entities. The entities that operate without any government intervention or regulation produce quality products. Most of the government agencies, such as the Interstate Commerce Commission and the Federal Drug Administration were created as a response to a problem. The purpose of this chapter is to examine some of the agencies.

In the years right before and after the Civil War, railroad growth in the United States...