James Surowiecki has been a long-time defender of corporate regulation. Not surprisingly, he now condemns the doomsayers who say Sarbanes-0xley is destroying the American markets.

They are out of touch with reality and guilty of over-simplification, he says in the New Yorker.

The SOX-bashers, he says, ignore the forces of globalisation. And they ignore the lessons of history:

"There's no doubt that Sarbanes-Oxley is an imperfect piece of legislation, but it is not a harbinger of doom for America's capital markets, and we should be skeptical of any analysis that says it is. Wall Street, after all, has greeted practically every important market regulation introduced in this century with howls of dismay and predictions of disaster. In 1934, the head of the New York Stock Exchange told Congress that if the Securities Exchange Act, which became the foundation of market regulation in the U.S., was made law there was a chance that stock trading in the U.S. would be "entirely destroyed." Needless to say, it wasn't. In 1975, when the S.E.C. abolished fixed commissions, the Street claimed that its business would be demolished. Instead, after transaction costs fell, trading volume shot up. And in 2000, when the S.E.C. required companies to disclose material information to all investors, rather than just to insiders, we were told that this would strangle the flow of information to the market and make stock prices swing wildly. But, as numerous academic studies have found, it has actually done the opposite. Maybe this time the doomsayers are right. But we need a lot more proof than we've been shown so far to believe that the wolf is really at the door."