A response essay written by Eliezer Yudkowsky posted at Cato Unbound for the issue Brain, Belief, and Politics:
Is That Your True Rejection? by Eliezer Yudkowsky
Eliezer Yudkowsky suggests that the partial mutability of human traits is an auxiliary reason at best for Michael Shermer’s libertarianism. Take that fact away, and Shermer’s politics probably wouldn’t go with it. Yudkowsky says that his own small-l libertarian tendencies come from the long history of government incompetence, indifference, and outright malevolence. These, and not brain science, are the best reasons for libertarians to believe what they do.
Moreover, we make a logical error when we infer shares of causality from shares of observed variance; the relationship between nature and nurture is cooperative, not zero-sum. One thing, however, is clear: Human genetic variance is tiny, as indeed it must be for human beings all to constitute a single species. Environmental manipulation can only achieve so much in part because of this universal human inheritance.
The lead essay has been written by Michael Shermer:
Liberty and Science by Michael Shermer
Michael Shermer discusses scientific findings about belief formation. Beliefs, including political beliefs, are usually the result of automatic or intuitive moral judgments, not rational calculations. One cluster of those intuitions presumes that human nature is malleable; these usually produce a liberal politics. Another group of intuitions presumes that human nature is static; these tend to produce conservatism. But Shermer argues that humans really fall somewhere in between — malleable, within some important limits. He argues that this set of findings should produce a libertarian politics.
At the obvious risk of making this too political (in my defense, everyone else started it), I'm not sure "no one except us ever realizes how bad regulation is" is the real problem here.
In my metacontrarianism post I talked about how when someone discovers a counterintuitive idea that only smart people can understand, they can become very excited and use it as a membership test for the Secret Society Of Smart People, to the point where they enter a Happy Death Spiral and blow it out of all proportion.
(for example, it's easy to think of ways modern Western civilization is better than primitive tribal civilization - more wealth, less prejudice, fewer tapeworms. There are also a few counterintuitive hard-to-understand ways primitive tribal civilizations are better than us - closer family bonds, more attuned to the natural world. And so many intellectuals focus on these to the exclusion of everything else and talk about how Western society is hopelessly corrupt and evil. Where they should be saying "Western civ is great, but not quite as great as the average person might think," we instead get "Western civ is awful." This passes unchallenged because the good things about Western civ like absence of tapeworms have become background noise to which everyone has adjusted. One interesting marker for this kind of behavior is that people still feel contrarian when they say it even though everyone who hears it agrees with them.)
I feel that some aspects of opposition to regulation might be this kind of behavior. There's a large background of successful regulation (like banning lead and fluorinating water and not dumping trash on the streets and so on) that no one ever notices (unless they've just come back from a country that doesn't have it!) There's also some highly available examples of regulation that goes wrong. People feel like these must be hard to catch and so can start a death spiral around how intelligent they are to notice.
So my explanation for why so many people don't understand that regulation is bad would be that this lack of understanding is not an actual phenomenon that exists in the real world. The US House of Representatives is currently dominated by a movement entirely based on eliminating as many regulations as possible as loudly as possible, and even their opponents pay lip service to the same ideas. This is another one of those cases where people say something everyone agrees with but still consider themselves "contrarian", which as I mentioned above makes me suspicious of a signaling effort.
I think the problem is less that no one understands regulation can be bad, than that talking about how no one understands regulation can be bad is a powerful signal.
...which still leaves the question of why most people who assert that they hate regulation support most actual regulation (eg Ron Paul will never get elected). I can think of a few explanations. Most cynically, they back away from their signaling when it has consequences, the same way the anti-Western-civ people would never actually move to a primitive tribe. Less cynically, there may be a status quo bias in which they process "new" regulation differently from existing regulation (though that wouldn't explain why people tend to support a lot of new regulation too). I think most plausibly it's a difference between Near and Far mode reasoning - regulation in the abstract is Far, any specific law is Near - and neither mode is necessarily "better" than the other.
(I was carefully trying to not sound like "us vs. them." Did that not come through?)
The only reason I think I partially disagree is that the reason many of the people who are against regulation are actually, well, against regulation, isn't because they've thought about the potential negative consequences. They'll cite things like freedom or a disdain communism, etc. And on the opposite political issues (e.g. military interventionism) they are more likely to be in favor of government heavy solutions.
With that being said, your point is duly noted. There are probably more people who are against regulation because they see potential negative consequences than my comment acknowledged.