Stigler Capture and Social Costs of Regulation

Although this whole episode of South Park is full of good material, for the sake of space I'll focus on how it makes the point that when interest groups try preventing competition, society looses:

This episode is about a Union trying to eliminate handy-car, a Uber-equivalent service that is eroding their market share. Throughout the episode, Mimsy (an economic-minded character) makes several good points about why anti-competitive practices are troublesome. First he questions why Union-members don't seek self-improvement and compete in the free market (3.45-5.15), then he argues that trying to help incompetent people defeats the role of the market as a natural selection mechanism that rewards the more diligent workers (6.25-6.50). Then he goes on to show how low barriers to entry help streamline the "taxi" services being provided.

Ultimately, we can see that established industries have a vested interest in restricting competition so that they are not forced to constantly improve, and we see that these efforts to restrict competition result in consumers having to settle for inferior products than a free market would provide them with. Therefore, we can see why it makes sense that industry would seek to self-regulate in order to secure a better position for itself, as Stigler shows, and why that's bad for society.

*Because South Park is exploring decreasing competition through breaking peoples' legs and getting them sued, the Stigler notion of regulation is not really explored. The mindset of seeking to decrease competition, however, is very clear. If we accept that industry will want less competition, and we see regulation as legal entry barriers that can benefit industry in its goals, then this episode proves the point nonetheless.