High Stakes in Regulating Electronic Commerce

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At a time when interest is increasing in Washington to regulate electronic commerce - sales of products via the Internet, for example - it seems desirable to reflect on the US experience with regulating economic activity. The stakes could be high. Even if the currently explosive growth rate of electronic commerce slows substantially, a significant portion of the national economy will be involved in coming decades. There are important lessons to be learned from examining the nation's past efforts to regulate business.

Lesson No. 1: Do not rush to regulate. Once a regulatory regime is in place, it is extremely difficult to reform. Those who benefit from the regulation …