> Lobbying for convenient rules, lobbying for weakened regulators has given far more advantage to firms, which then use that wealth to become rent seekers. They dont need to innovate, because they can litigate.
One of the big problems here, and the lobbyists do this on purpose, is that they promote the false notion that the issue is the quantity of regulations and not their substance. Quantity can be an issue when the number of regulations becomes excessive and their sheer number thwarts competition by creating high barriers to entry, but "incumbents want fewer regulations" is not only misleading but typically the opposite of what really happens.
Incumbents want to get rid of regulations that protect competition and add regulations that inhibit it. What we need, of course, is the opposite. Which isn't as simple as "make number of regulations go up/down", it matters very much which ones and what they do.
> Compliance costs ensure fair play between entities of unequal strength.
This is completely the opposite. Compliance costs are generally fixed costs, i.e. every entity has to hire a lawyer and pay them $250,000. For a megacorp this is negligible and they don't even notice, for a small business they're now out of the market because that amount of expense would bankrupt them. The more rules you have, the higher that number gets. This is the sense in which the absolute number of rules matters.
But it still depends what they are. Even if you only have a couple of rules, the incumbents will want rules that only they can comply with. Conversely, you can hypothetically have a lot of rules and still have them easy to comply with, though this is certainly easier said than done. What you really want is to have a small number of rules, but the right rules -- the ones the incumbents don't want and their smaller competitors do.