Common sense regulations like safety and such make sense, but isn't that just part of the "race to the bottom"? I mean, if a regulation is well-written, it either affects all participants equally, or affects larger market participants more to enforce a balanced market with many competitors and healthy competition.

I could see it might be something other than described, or I might not be getting some implication here, but what is described here sounds like a "race to the bottom" with regard to profit margins, and that is how a market economy should work, at least according to my very basic econ studies.

The same exact product offering should have decreasing profit margins due to competition, which companies should compensate for with innovation, but what happens very often is that market distortions are introduced by either the government or big market players to heighten profit margins artificially.

I'm reading this sentence as "profits go down drastically as competition sets in". That doesn't preclude regulation.

Thanks for entertaining my questions, I am really trying to understand the point here.