In my syndicated column today I write about how the Internet shows that regulation is often not necessary.
Complete strangers exchange big money there every day.
It does have regulation, just not government regulation.
On my next TV show, titled "Freedom 2.0" (which the Fox Business Networkairs this Thursday at 9 p.m. EST), economics professor Ed Stringham explains that Paypal.com, which transfers billions for people, at first assumed they needed government help to prevent fraud.
"They faced fraudsters from all over the world. They turned to the FBI," says Stringham. "But the FBI had no idea who these people were."
So PayPal invented a new form of regulation. "They developed a private fraud detection system, where they used computers to say, 'This might be fraudulent,' and then it would send it to a human to investigate that." That dramatically reduced fraud, and PayPal thrived...
For more examples of private regulation working better than government regulation, the rest of the column is here.