By the law of displacement (pp. 4.11:11-14), private inspection and evaluation of consumer products—certainly a valuable service, which could be provided by various free-market mechanisms—will tend to disappear from the regulated market. Since such inspection is now provided "for free" through taxes, only the most fastidious or wealthy will be willing to pay for private consumer protection, even though many others, who may have heard about botched USDA inspections and similar horror stories, would regard a competitive inspection service as more reliable if the marginal costs were comparable. Because of this displacement effect, the issue of governmental consumer regulation should not properly be framed in terms of "protection" versus "non-protection." The real alternatives are (a) coercively imposed monopolistic "protection" and (b) the voluntary, competitive system of product information and quality control displaced by such regulation.

As was already observed, the substitution of an imposed "authority" for the consumer's personal judgment tends in the long run to impair the consumer's decision-making ability (pp. 4.10:5-6), leading to a general deterioration in the quality and safety of purchased products, even if the "authority" has the best of intentions. This point is difficult to appreciate because we may feel absolutely certain that we know better what is good for consumer X than she knows herself—and, in a particular case, we may be right.