Yesterday former SEC Chairman Arthur Levitt published a piece in the Wall Street Journal calling for more regulators as a response to the Madoff scandal.

Amazing! This regulator, who approved Bernie Madoff to head Nasdaq and put him on a reform commission associated with the Securities and Exchange Commission (SEC), now tells us that he was right all along and we need more regulators. Others have called for higher pay for regulators, or more power for regulators, or more independence for regulators from our elected representatives.

Am I the only guy in America who thinks that the Madoff scandal should discredit the regulatory state, rather than lead to an expansion of it?

Levitt was the chief cheerleader of what Larry Kudlow calls the "goo-goo" good government crowd--Financial Division. Did that stop Madoff? Heck no! Madoff was a big player in that crowd. Close to Levitt and other financial scolds, Madoff threw loads of money at Democrats who sat on regulatory oversight committees. Levitt even said that Madoff's niece married an SEC official.

Economist Joseph Schumpeter--the "creative destruction" guy--formulated another highly insightful economic principle called "the capture theory."

Schumpeter said that regulatory bodies that are created to control a specific industry will eventually be captured by the industry they're supposed to be regulating. The revolving doors, the overlapping social spheres, the pure intensity of incentive that comes when a group of individuals get to control the business dealings of another group of individuals--all of these add up to a situation in which greater regulation makes the system less honest.

More regulation means less transparency, integrity and stability. The larger the government, the greater the incentive to for special interest groups to capture control of it. Corruption is directly proportional to the size of government. This is just basic public choice theory.

This article originally appeared on Forbes.com.