Good Intentions and Unintended Evil

Relying on Adam Smith's concept of the "invisible hand," every economist can explain how markets react to individual economic power. Markets shape and reshape themselves to neutralize self-interested economic power by coaxing it into channels that serve the public good. But economists have devoted less attention to analyzing how markets systematically counteract coalitions of individuals' political power. Regulatory restraints imposed by the "visible hand" of political power shape markets just as surely as economic power does, but in ways designed to create or perpetuate economic power [15]. This paper endeavors to show that introducing political power into economic affairs initiates a dialectical process of adjustments and counteradjustments. In what resembles reflex action, markets rechannel regulatory power, as regulatees short-circuit regulator intentions