A closer look
Imagine outlawing all startups because one massive, state-sponsored Ponzi scheme was feeling insecure. In 1720, the British Parliament passed the Bubble Act, making it illegal to form a joint-stock company without a royal charter. They didn't do this to protect consumers; they did it to squash competition for the South Sea Company, a deeply corrupt government-backed monopoly that was currently in the process of blowing up the British economy. The ban stifled natural corporate innovation in England for over 100 years.
