Quote Originally Posted by CoccoBill View Post
Maybe it's just me but I saw the piece completely differently. Dr Oz and other snake oil salesmen are able to operate, because the regulating bodies are stymied by market forces (lobbying). The market is already open to have self-regulation, it's not like the FDA has a monopoly on that. Anyone "could" start a competing business. Why hasn't the market dealt with snake oil salesmen?
Renton is correct about lobbying not being a market force. Lobbying is an attribute that exists only because of legal monopoly held by government

I'll add that, in a way, FDA does have a monopoly that disincentives self-regulation. Here's an analogy: there is no market or no industry that could compete in domestic security because the government mostly monopolizes it, and so the private infrastructure isn't constructed. However, if government was no longer allowed to provide domestic security, we would see all sorts of new, competing enterprises in the arena. For the FDA, entrepreneurs don't enter its territory because the FDA has a structural advantage and distortion by law. If there was no FDA, I think a lot of the good that entrepreneurs could bring to the food safety arena is unpredictable (that's how innovation by competition works), but some of the simpler stuff would be like different agencies putting their reputations on the line by doing things like stamping approval of certain products. Some already do this (like Oz or Joe Rogan), but it's small scale and niche. At least up till now, Oz has gotten away with calling something a miracle drug, but larger companies couldn't. Imagine what the market would do if McDonalds said eating a Big Mac a day keeps the doctor away

Furthermore, selling snake oil isn't really a problem. Sure, I wish people couldn't do it, but I don't see how it can be regulated against. A lot of people read the Bible and it makes their lives ultimately worse off, but it's wrong to regulate against that. Likewise, people freely choose to buy wonderdrug sugarpills that do nothing, and we shouldn't regulate against it. The one thing that would solve this problem is market forces that include all sorts of things like the creation of actual drugs that actually work (and kick the fake drugs out of the space) or non-profit campaigns to change the culture and beliefs

Why hasn't the market dealt with snake oil salesmen?
Sometimes when I'm outside, I get rained on and I don't like it. Why hasn't the market fixed this? Sure, there are raincoats and umbrellas, but they're not perfect

I point this out because market proponents don't claim that it solves all problems. What we do claim is that if a problem is solvable, market forces are the best way to get there. Like Bryan Caplan said in one of the lectures I linked, economists only start worrying about problems when they can't figure out how an entrepreneur could get rich by solving it