Marxists and libertarians agree

Marxists and libertarians agree that as long as government is allowed to impose wide-ranging restraints on business and as long as business retains substantial independence and ability to gather and spend profits, regulatory capture will happen.

How it happens:

Regulators may start off hostile to their subjects, and in some cases this is very much deserved.... Over time...the major players in the regulated field find that they can use regulation to keep down competition. The more elaborate the regulations that participants must follow, the more advantage big and established firms gain over their smaller and newer rivals. Regulations are easier to enact than to remove, so regulated firms can back rules that enshrine current procedure and put innovators in the awkward position of having to fight the regulators for change to happen - and because popular memory recalls that a lot of anti-regulation rhetoric is and has been cover for claims that businesses ought not be responsible for their actions, the innovators can readily be made to look bad to the general public.

In addition, regulatees who gain the sympathy of regulators as "team players", "responsible, cooperative enterprises", and the like get favors. There's nothing innately sinister about this - we pretty much all give extra consideration to the people we deal with who don't screw us over, help us out, and the like.... Regulated firms end up supplying not just data to regulators, but personnel. After all, who understands the field better than folks who are retiring or resigning from the field's major participants?... At this point the regulatory agency has been captured, and once it happens, it's proved nearly impossible to fix. Any effort to abolish the agency and start over will be met with cries that someone wants to do away with any government oversight of the issue. Even mild efforts at changing the agency's composition or mission will get the same treatment, because popular and (more importantly) media mythology says that to curtail a present government activity is to wish for all related activities to cease, and anything else is just smokescreen rhetoric.