> There are already signs that startups may not spread particularly well. The spread of startups seems to be proceeding slower than the spread of the Industrial Revolution Government was much smaller at the time of the Industrial Revolution. The theory of "regulatory capture" says that government is responsive to those firms that are affected by government regulation and have the money to buy favorable legislation. T…
We've funded lots of startups and we hardly ever see cases where they're crushed by big companies. The biggest exception is music. But though the record labels have certainly captured congress, their lawsuits tend to destroy startups before government regulation does.
Their lawsuits are only able to destroy startups because government regulations (i.e. laws) let them. So this is government regulation at one remove.