I'm not asking what scaling solution is best. I'm asking the question: if the market wants to be at Q* but the production quota forces it to be at Qmax, who exactly will enforce the quota (especially over the long term as forking pressure builds)?
Normally, the answer is "the government" (or some powerful organization). But something like Bitcoin is governed by the market itself, is it not? How can the market enforce a quota that the market itself does not want? Well, I don't think it can.
There's a subtlety here: is the "thing" that will enforce the quota necessarily the same "thing" that wants to break the quota? The answer is not completely clear to me...
The code Peter, the code! Bitcoin is not governed by the market!...
Good; I sort of agree. Bitcoin is indeed governed by the code that people run. But is it not these same people who
choose which code to run? And are not these the same people who, in aggregate, become "the market"?
I would argue then, that in the final analysis, it is the will of the market that controls the code and thus it is the will of the market that governs Bitcoin.