Abstract: Robert Crandall writes as if the regulatory state is a simple failure. In fact, however, from the economic point of view there have been many successes, in the form of regulations whose benefits exceed their costs. Moreover, economic criteria are inadequate for evaluating regulatory performance, since even well‐aggregated private willingness to pay provides a poor basis for assessing government regulation. It is now necessary to move beyond sterile debates about whether regulation is desirable; nonregulation is not an option, since laissez faire is itself a regulatory system. Democratic, economic, and constitutional criteria hold out the promise of much better regulatory tools, in the form of flexible incentives rather than rigid commands.