It requires years of consistently excellent performance to acquire a reputation and to establish it as a financial asset. Thereafter, a still greater effort is required to maintain it: a company cannot afford to risk its years of investment by letting down its standards of quality for one moment or for one inferior product; nor would it be tempted by any potential “quick killing.”

Newcomers entering the field cannot compete immediately with the established, reputable companies, and have to spend years working on a more modest scale in order to earn an equal reputation. Thus the incentive to scrupulous performance operates on all levels of a given field of production. It is a built-in safeguard of a free enterprise system and the only real protection of consumers against business dishonesty.

Government regulation is not an alternative means of protecting the consumer. It does not build quality into goods, or accuracy into information. Its sole contribution is to substitute force and fear for incentive as the protector' of the consumer.

Minimum standard gradually become the maximums, and regulation undermines the moral base of business dealings.

It becomes cheaper to bribe a building inspector than to meet his standards of construction. A fly-by-night securities operator can quickly meet all the S.E.C. requirements, gain the inference of respectability, and proceed to fleece the public. In an unregulated economy, the operator would have had to spend a number of years in reputable dealings before he could earn a position of trust sufficient to induce a number of investors to place funds with him.

Protection of the consumer by regulation is thus illusory. Rather than isolating the consumer from the dishonest businessman, it is gradually destroying the only reliable protection the consumer has; competition for reputation.

While the consumer is thus endangered, the major victim of protective regulation is the producer: the businessman.

Who made such an outlandishly childish, nonsensical and morally repugnant statement? Who still believed it at the beginning of the twenty first century?

Actually, the quote is from Allen Greenspan circa 1963, courtesy of Bloomberg News. Unfortunately, little Allen never could get past his high school pet obsession with Ayn Rand. And now the people of America shrug.