Policymakers often argue over whether capitalism works and how aggressively it should be restrained. But they rarely ask the more pertinent question: where, exactly, does large-scale laissez-faire capitalism even exist?
The uncomfortable answer is that in the 21st century, it barely does. Across sectors, federal policy does not merely regulate at the margins; it often coordinates at scale, sometimes through forms of rulemaking that do not appear in the traditional Federal Register. Prices, payment flows, entry conditions, risk allocation, technology adoption, and even product, service, and infrastructure design are often administered from the top down.
Conventional antitrust policy fixates on private-sector concentration, often treating mergers with reflective suspicion. The Herfindahl-Hirschman Index, for example, measures market concentration at the firm level. But such transactions are largely beside the point. The deeper reality confronting the consumers antitrust law purports to protect is coercive public-sector concentration. Mergers and market concentration pale in comparison to the accumulation of federal steering authority over entire sectors, their business models, and ultimately the economy itself.
The irony of antitrust policy is that larger private firms are often beneficial — and increasingly necessary — to a productive future. Consider nationwide autonomous vehicle networks, drone corridors, charging infrastructure, data centers serving private AI and crypto ventures, smart cities, and commercial space enterprises. These projects require scale. Yet antitrust, in its block-and-tackle role, all but assures that government will steer them, since private firms are unlikely to be permitted to attain the scale necessary to coordinate such systems. This is one reason why we have at times called not for reform of antitrust, but for its abolition.
Subsidies, loan guarantees, public-private partnerships, and partial nationalizations further compound capitalism’s displacement.
The Capitol Control Quotient (CCQ) shifts the lens of suspicion from harmless and necessary evolutionary firm concentration to the concentration of political steering across entire sectors. It is illustrative and comparative, not econometric. There is no meaningful way to assign a literal “percentage controlled by Washington” to any given sector. The CCQ instead asks a comparative institutional question: Do companies and sectors govern themselves, or does federal policy dominate outcomes?
The framework assesses four types of intervention across eleven sectors using a simple Low-to-Extensive scale. Unfortunately, high steering is common.
The CCQ evaluates federal control along four structural vectors:
- Spending dependence: The extent to which a sector’s revenues and capital structure are anchored in federal appropriations, guarantees, subsidies, or explicit or implicit backstops.
- Operational regulatory intensity: How pervasively conventional federal rulemaking and guidance penetrate day-to-day business decisions, processes, compliance systems, and permissible conduct.
- Entry controls: The degree to which licensing, certification, allocation, chartering, or permitting determine who may participate in the market.
- Pricing/output constraints: The degree to which government shapes prices, reimbursement, production levels, product design, or service mandates.
Other classifications are possible, and my assessments likely will change. But these four capture primary channels of political coordination and incentive-shaping that have preoccupied much of my work — particularly amid the post-COVID swelling of the spending and regulatory state.
The exercise reveals a pattern that conventional debates over corporate concentration obscure. In key areas — health care, housing finance, energy, transportation, higher education, telecommunications, and strategic technology — federal steering is not peripheral but structurally embedded. Remove the federal overlay and entire sector architectures would scarcely resemble what we see today — and would continue to evolve along very different lines. Retail and some segments of software remain comparatively less steered — for now.
The CCQ is part of a broader effort to illuminate something deeper than regulatory accumulation alone, which I examine in surveys like Ten Thousand Commandments and inventories of regulatory dark matter. The problem is not simply the quantity of rules. It is the architecture of administrative allocation.
This predicament persists largely unnoticed because capitalism was effectively short-circuited and replaced by the administrative state before it fully spread its wings. Early capitalism developed property rights for “short-and-fat” tangible assets such as land, machinery, and physical goods.
Modern economies revolve instead around “long-and-thin” assets and newly feasible rights-of-way: spectrum, airspace, data, algorithms, environmental sinks, orbital slots, emergent smart-city networks, and so forth. Property rights and flexible ownership structures across overlapping, multifunction systems could have evolved. Instead, they were preempted and regulated in isolation by siloed agencies, destroying vital synergies.
Where decentralized ownership frameworks remain underdeveloped, administrative allocation predictably fills the vacuum. That is what the CCQ shows.
We cannot know precisely what alternative institutional evolutions might have emerged, but instead of federal steering we could have developed stronger property-rights regimes — such as exclusive and tradeable spectrum ownership, layered airspace rights, user-financed and overlapping cross-sectoral infrastructures, bottom-up smart-city governance, and liability-based approaches to environmental harms.
Technological advances make difficult property-rights resolutions and competitive governance mechanisms easier, not harder. Market failure is routinely invoked to justify regulation, but that regulation has entrenched high levels of central steering. The CCQ implies that political failure is instead the primary concern. For decades, the administrative model has interrupted the emergence of markets. It crowds out decentralized processes that produce genuine regulatory and disciplinary expertise, even as agencies defend their authority as indispensable repositories of wisdom and knowledge of the public good.
The CCQ does not claim that markets have vanished, but it shows that they increasingly operate within politically constructed architectures. Economic coordination has become concentrated — but in Washington, not in corporations, which need far greater freedom to coordinate and rise above these artificial constraints.
We are not on a capitalist path. On our current trajectory, many future mega-scale projects will be government-dominated.
