To the likes of OpenAI and Anthropic, red tape would be a subsidy.
The leaders and employees of major AI developers, especially OpenAI and Anthropic, make headlines whenever they fret in public that their products might kill us all, or when they practically beg Washington to regulate their industry. As a layman, I do not know whether advanced AI models will become dangerous if left unchecked. But as a student of public choice theory, I have learned to be skeptical of any industry that begs for more regulation. Usually, when that happens, entrenched interests are hoping to stay entrenched.
Remember when Mark Zuckerberg asked Congress to impose myriad rules on social media companies, purportedly to protect users? There was no standard the government could enact that Facebook couldn’t have adopted voluntarily. Now that Meta is under a binding settlement to reform its websites, it hounds other platforms — YouTube, TikTok, Snapchat — to follow the same rules.
How about college football, still clinging to the fiction of “student-athletes” and asking the government to restrict their compensation and free agency? All in the name of competitive balance, of course — not so that schools can keep television dollars for themselves. Regarding this cartel, George Will identified a broader principle last year: “It is axiomatic: When an industry begs government to regulate it, assume that it is seeking protection from threats to the status quo with which it is comfortable.” The rush to federal oversight shows “how government collaborates with society’s big battalions to resist disruptions.”
The same is true when an industry asks to be taxed, such as the hospitals that cried foul when Congress limited states from “taxing” their patient services and then funneling the money back to them as higher Medicaid payments. These clever financing schemes let state governments capture more money from the federal government so that hospitals come out ahead. If they weren’t the ones truly paying for Medicaid, someone else was.
On artificial intelligence, perhaps an earnest case for regulation can be made. One clear effect of regulation, however, would be to erect new barriers to entry — and therefore moats against competition — that benefit current market incumbents. It should come as no great shock that those incumbents are the loudest voices asking Washington to shower them with red tape. In their view, entrenchment is a subsidy.