^Regulation certainly can be overdone, and it can be suborned and co-opted, and it sometimes gets way out of date or carried away too far, becoming an end in itself rather than a mechanism to do good. But that can be fixed.^

As I have mentioned many times, this is already true in hundreds of categories. Let's fix it.

Anyway, all of this just brings us back to the main question: How do fallible humans regulate other fallible humans?

Government regulatory entities have the same flaws as any other monopoly. When they're legally the only game in town, they start to act like it.

How about something like this?

Underwriters Laboratories operates by taking fees from the private sector to earn a rating that is almost impossible to sell certain consumer products without. There are also outfits like Consumer Reports, and there are non-government professional organizations that regulate professions.

Now, imagine many such organizations. Their job, like those of existing outfits, would be to investigate private products and services, and if found acceptable, stamp them with their seal of approval. The seal's value (and the price one could charge for the service) would be proportional to the reputation of the inspection agency. Other jobs might be to snoop out malfeasance and gain merit for their agency by exposing it. Hey, it made money for 60 Minutes.

Each such agency would be competing to be the most reputable (commanding higher fees) and most importantly, each looking for any sign that a competitor might be fudging their results or taking kickbacks. A government regulatory monopoly getting too cozy with its target industry has no real fear of exposure except by mischance. What average American would have heard of the MMS misbehavior at all except for this accident?

Behold, greed and profit-making in the service of consumer protection! Who watches the watchmen? Other watchmen who stand to make more money if they catch one of their own screwing up. Attempts to create a large-scale collusion would last only until one blew the whistle to wreck the others and take over their turf. Honesty literally pays.

A heirarchy of services would develop over time. Flawed ones would be exposed and destroyed by their competitors but eventually several good services might each have a market share. No doubt some product manufacturers might seek prestige in getting seals from several top agencies. Again, unlike a government agency, which is almost immortal despite misbehavior, these companies' existence depends on their good behavior.

If people are nervous about not having the government holding their hands at some level, there could be some mild regulation of these outfits, much as OSHA does for private testing laboratories now, but this isn't really necessary.

I've worked out a lot of details on this over the years, but this is the essence of it. There's no real room for such things now. Given UL, Consumer Reports, and others, there's an existing niche for non-governmental regulation, but with the overwhelming legally-mandated government monopoly in this area, this niche is very small. Private product testers are the small mammals among the government regulator dinosaurs.

I'm not sure there's any way to get from here to there, although I'm quite happy with the greater access to consumer information that the internet gives.