How much regulation is needed in a free enterprise economy?

Question:

It's been my observation that the less regulated a capitalist economy, the more it tends to concentrate more and more wealth into fewer and fewer hands. If you picture some kind of enterprise that results in a net gain for someone, then picture this person investing his profit in another enterprise it would seem to me that capital is being concentrated. This scenario being repeated and repeated, the result can only be the establishment of an aristocracy and a proletariat. Of course, it won't be a a straight line, in some cases the business will fail and the investors capital will be scattered. But it will then start collecting again. It seems analogous to the concept of entropy increase. Doesn't this seem to argue for some sort of redistribution of wealth?
I suppose I'd better point out that I am well aware of the fact that a profit motive is important. If a business fails, then the employees have lost a job. But the investor has lost perhaps his "job" plus X dollars. (p

Answer:
You are dreaming. Regulatory bodies are captured by industry groups who then get rid of competitors. The lawyers and civil servants make a fortune out of essentially useless knowledge about how to use the system. Politicians then sell favors to release people from the system. Courts are invoked to get people out of the system. There grow up two alternative bars - the bar composed of regulated industry lawyers and the bar composed of their opponents.

A free economy will regulate itself - thats what the titile of this type of economic structure implies- the law of supply and demand govern.

Is your goal equality or highest standard of living.
Your beginning premise is that a net gain to someone is a net lose to someone else and that is not the basis for a free enterprise system. If that were true then a command economy is the best way to go. Remember, everytime the investor starts a company he is producing something someone wants to pay for that is not being made or at least he is making it cheaper or better. Therefore as the investor is making money the people consuming the good is also better off since they chose to buy it. Both are better off. If on the other hand the investor knows that if they make money it will be taken and redistributed then why would he take the chance on losing it by starting a business

I thought according to the "laissez-faire" principle, the less regulation, the better.

I hate to break the news to you, but the United Stated government has become MUCH larger and has created MUCH more regulation over the last 30 years. Wealth has been concentrated into the hands of the few just as government grew larger, more controlling and more regulatory.
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Now if you want more regulation I suggest this experiment.
>> Give up all the innovations of American free enterprise and live off the innovations of more regulated Europe. You can start by giving up the Internet and computer technology, along with a whole host of things I won't list.
Then determine which standard of living you prefer.
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How much regulation is needed in a free enterprise economy?

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