Presumably, government regulations are in theory made to secure some “common good” and not a result of regulatory capture (of permanent profits) by the dominant firms in an industry who themselves write their own regulations to clamp down on competition.
But even this ideal theory is highly problematic.
First of all, it is the consumers who “regulate” businesses by buying from those who serve them well and by refusing to buy from them those who are incompetent.
Government regulations simply impinge viciously on this consumer sovereignty by introducing a foreign and un-utilitarian influence on the market.
Second, let’s assume, per impossibile, that a given regulation is actually useful. There are two possibilities: either the regulation outlaws all progress in the industry or it permits some progress.
If the former, then it is utterly perverse and fails to be in the interest of the common good, since this good consists precisely in everlasting improvement in the people’s standard of living.
If the latter, then it is obsolete the moment it is enacted, because the market flows, changes, and improves every day. Regulations that make some superficial sense today will make no sense for the economy a year from now. Yet repealing regulations is an arduous task that can take decades; and in the meantime, a huge amount of progress or creative advance that could have taken place fails to do so. Ancient and now counterproductive regulations steer the market’s evolution into uneconomic and wasteful channels.
Thus, the regulatory state is shown to be an absurdity in every case.