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12 Regul. Rev. Depth 1 (2023)

handle is hein.journals/rgyrvidh12 and id is 1 raw text is: FROM REGULATION 1.0 TO 2.0 Kara SteinT For over twenty years, I have had one of the best seats in the house to observe the workings of regulation from all angles. I have had the opportunity to organize congressional hearings, draft legislation, serve as a commissioner at a regulatory agency, teach financial regulation, and now sit on the board of an audit regulator. All these experiences have helped shape my belief that regulation is vital to the welfare of our democracy. But this experience also fuels my concern that we need to address new dilemmas raised by changing technologies. The environment in which the regulatory system functions is changing rapidly. As the economy and society change, regulation needs to evolve as well. I call the direction in which we are heading-whether we like it or not Regulation 2.0, or the next generation of regulation. The language of Regulation 2.0 focuses us on the revolution in communications and digital technology. And it contrasts with our regulatory beginnings, which I call Regulation 1.0. I. REGULATION 1.0 The U.S. experiment in federal regulation largely began after the Civil War. The formation of modern corporations, coupled with mass production, produced rapid changes in the U.S. economy, with long-lasting effects. This American industrial revolution demanded substantial amounts of capital for the building and operation of factories, mines, and railroads. Corporate investment drove rapid economic growth that was largely beneficial. But there were unintended and unwelcome effects. Building the infrastructure of the nation was not cheap, easy, or fair. Managers flexed the power of the corporation to maximize profits and reduce competition through consolidation. Unrestrained by laws, regulations, or even ethics, managers t Board Member of the Public Company Accounting Oversight Board (PCAOB). This essay is an edited version of the 2023 Distinguished Lecture on Regulation at the University of Pennsylvania Carey Law School. The views expressed here are those of the author and do not necessarily reflect the views of the Public Company Accounting Oversight Board, my fellow Board members, or the staff of the PCAOB.