"Regulatory capture": That's the name of a phenomenon that derails the liberal dream of using government power to tame economic power. The idea is that nobody will care as much about a regulatory body as the companies being regulated — and the biggest companies will have the resources to influence the agencies the most.

This results in toothless regulations and in regulations that kill competitors.

For an example of how regulatory capture happens, read today's Washington Post:

A scientific panel that shaped the federal government’s policy for testing the safety and effectiveness of painkillers was funded by major pharmaceutical companies that paid hundreds of thousands of dollars for the chance to affect the thinking of the Food and Drug Administration, according to hundreds of emails obtained by a public records request.

The emails show that the companies paid as much as $25,000 to attend any given meeting of the panel, which had been set up by two academics to provide advice to the FDA on how to weigh the evidence from clinical trials. A leading FDA official later called the group “an essential collaborative effort.”