^{Democracy & Technology Blog} Government does not exist to protect investment expectations

Last week George Gilder, Bret Swanson and I met with a powerful Senator who told us he is being urged to “go slow” on deregulation because it would be unfair to change the market conditions that existed when investments were made. Of course, this is a Luddite argument against any progress at all. Telephone companies invested billions before VoIP. Cable companies invested billions before IPTV. And rural telephone companies invested billions before wireless offered a cheaper way to connect remote consumers. Should government slow the deployment of alternative technologies that cost less and offer greater functionality? Not if it cares about consumers and taxpayers.
Investment is motivated by a desire for inordinate profit. Successful investment achieves a temporary monopoly, and invites competitive entry and disruptive innovation. Nothing lasts forever. If government wants to be fair, it should neither accelerate nor decelerate this process. Government engages in industrial policy when it decides that some investments are more worthy than others.