The greatest artificial intelligence systems in existence today- Claude, Grok, GPT-6, Gemini were built without a single government bureaucrat directing the process. Private capital, competitive pressure, and the profit motive did what no five-year plan ever could: they produced genuinely transformative technology at breathtaking speed. Now governments want in. The European Union's AI Act, fully enforced as of August 2026, classifies AI systems by risk tier and mandates compliance costs that smaller competitors simply cannot absorb. Incumbents like Google and Microsoft absorb those costs easily. Startups die. Regulatory capture produces gatekeepers who write the rules to protect their own market position. The knowledge problem here is severe. Regulators in Washington or Brussels lack the information required to determine which AI architecture is "safe," which training dataset is acceptable, or which capability threshold triggers mandatory oversight. Prices and competition generate that knowledge through trial, error, and consumer feedback. Bureaucrats generate paperwork. The argument for regulation always sounds reasonable: safety, accountability, preventing harm. Then you watch the FDA's drug approval process kill people through delay, or the FCC's spectrum management strangle wireless innovation for decades before partial deregulation finally unleashed mobile broadband. The pattern repeats without exception. Private liability law handles genuine harms. If an AI system defrauds you, injures you, or destroys your property, courts and contract law provide remedy. That mechanism already exists. What regulation actually does is socialize risk for large players while pricing smaller competitors out of existence, leaving you with fewer options and higher costs, not a safer world.