The user of a theory has a simpler task: his not to reason why, his but to sigh and try. If the right element in the diverse situations has been isol… - George Stigler

Dr. Smith and all of his sensible disciples have believed that people would not strive to do anything well unless there were a reasonable measure of agreement between the success of their efforts and the rewards they would receive.

Regulation may be actively sought by an industry, or it may be thrust upon it. A central thesis of this paper is that, as a rule, regulation is acquired by the industry and is designed and operated primarily for its benefit. There are regulations whose net effects upon the regulated industry are undeniably onerous; a simple example is the differentially heavy taxation of the industry's product (whiskey, playing cards). These onerous regulations, however, are exceptional and can be explained by the same theory that explains beneficial (we may call it "acquired") regulation.

Two main alternative views of the regulation of industry are widely held. The first is that regulation is instituted primarily for the protection and benefit of the public at large or some large subclass of the public. In this view, the regulations which injure the public -as when the oil import quotas increase the cost of petroleum products to America by $5 billion or more a year- are costs of some social goal (here, national defense) or, occasionally, perversions of the regulatory philosophy. the second view is essentially that the political process defies rational explanation: "politics" is an imponderable, a constantly and unpredictably shifting mixture of forces of the most diverse nature, comprehending acts of great moral virtue (the emancipation of slaves) and of the most vulgar venality (the congressman feathering his own nest).