AI Leaders Are Asking to Be Regulated. This Is Nothing New.

After Dario Amodei, CEO of the AI company Anthropic, penned an open letter calling for AI regulation, Rahm Emanuel took to X. “I’ve served in two White Houses and in Congressional leadership,” the former Chicago mayor wrote, “and I can tell you when the last time a CEO or an industry at large asked to be regulated: never.” 

Emanuel’s statement reflects the commonly held progressive myth that conniving Robber Barons do everything they can to impede the state’s noble effort to regulate them, but nothing could be further from the truth. 

Business leaders have long lobbied to have their own industries regulated. In fact, an entire body of historical scholarship is devoted to that phenomenon. Historians such as Gabriel Kolko, Robert Wiebe, and James Weinstein spent their careers detailing how Big Business allied with progressive reformers and politicians to construct the federal regulatory apparatus.

What does Big Business have to gain from regulation? More than anything else, to suppress economic competition and avoid cutting prices. 

“Competition was unacceptable to many key business and financial interests,” Kolko wrote in his landmark history of the Progressive Era. “As new competition sprang up, and as economic power was diffused throughout an expanding nation, it became apparent to many important businessmen that only the national government could rationalize the economy.”

Railroads were the first major industry to face widespread regulation, and the champions of the movement were railroad tycoons who had grown weary of the competitive pressure to cut prices. One railroad president endorsed the proposed Interstate Commerce Commission as the solution to “the prevailing contagion of depression and loss, from the effects of ruinous rates, which were uncontrollable from a lack of adequate protection of railroad interests.” Attempts to cartelize the railroads under the leadership of J. P. Morgan predictably failed owing to the strong incentives to offer discounts to shippers in the hope of generating enough traffic to cover the high fixed costs of building track networks. 

Business leaders in other sectors adopted the same strategy for suppressing competition. The public-school narrative of American history teaches that Upton Sinclair’s The Jungle, an entirely fabricated account of Chicago’s meat-packing industry, triggered the onset of economic regulation. In reality, twenty years beforeThe Jungle was published, the so-called Beef Trust was already lobbying for inspection laws to protect them from European competition. 

The corporatist state reached its apex during the New Deal, when President Franklin Roosevelt invited executives from the nation’s largest companies to Washington to draft their own protectionist regulations under the ultimately unconstitutional National Industrial Recovery Act. Mammoth corporations were in a better position to absorb regulatory costs than their competitors, and price controls made it impossible for smaller operations to undercut them. In one instance, the National Recovery Administration even jailed a businessman for charging customers five cents less than his industrial code allowed. 

Today, large companies are reluctant to explicitly acknowledge their desire to suppress competition when they lobby for regulations, but the playbook is essentially unchanged. When Apple publicly endorsed California State Senator Scott Wiener’s bill to require California businesses to disclose their greenhouse gas emissions, the company insisted that “fighting climate change” was one of its top priorities. Apple boasted that it had already been measuring and reporting its climate emissions, implicitly acknowledging that its business model would be unaffected by the burdens the new rule imposes on its smaller competitors.

The nascent AI industry is already enormously competitive, and rivalry has contributed to rapid advancements in the quality and availability of the technology. Dario Amodei’s plea for regulation sounds the alarm about “cyberattacks,” “bioterrorism” and “serious economic disruption,” but underlying all of those concerns is a fear of market competition. “A race to the bottom, spurred by commercial incentives,” he writes, “can make these risks more acute.” 

More likely, he fears that Anthropic cannot win a marketplace contest that rewards quality and affordability. Like so many business leaders before him, Amodei views the regulatory state not as the protector of consumers, but as the guardian of his own self-serving corporate interests.