Vox recently published an article claiming that Charles Koch is right and Bernie Sanders is wrong about how the economy is rigged. Both agree that there are laws that unfairly favor some financially over others. Sanders often claimed during his campaign that the rich have used their money to lobby for laws that favor their interests over those of everyone else. Meanwhile, Charles Koch has condemned excessive regulation and restrictions on economic freedom that allow the few to bend laws in their financial favor against the many. In looking at the real problem in the economy, Charles Koch’s analysis of the problem comes closer to the truth.
Conservatives are known for arguing about the ill effects of over-regulation, reminding us how it stifles innovation, cramps entrepreneurship, and harms small businesses. Where we’re less effective is connecting this reality to the more fundamental abuses it wields on human dignity in general and the poor and vulnerable in particular.
In a 45-minute talk given at Heritage Action, Senator Ben Sasse of Nebraska offers a detailed critique of over-regulation in America.
Pointing first to the proper scope of regulatory policies, Sasse proceeds to note the increasing overreach of the federal government and the range of reasons to oppose it. Watch an excerpt here:
Although arguments about over-regulation and taxation are bound to involve in depth discussions about numbers and econometrics, Sasse reminds us that our focus must remain on the preservation of freedom and human dignity. (more…)
What is the annual cost of regulations for America?
The short answer is that no one knows for sure. The officially reported regulatory costs as reported by the Office of Management and Budget (OMB) total up to $128.7 billion. But the real costs of regulation is impossible since, as the Nobel-winning economist James Buchanan said, “Cost cannot be measured by someone other than the decision-maker because there is no way that subjective experience can be directly observed.”
Still, we can attempt to estimate the costs based on factors that can be measured. Clyde Wayne Crews Jr. of the Competitive Enterprise Institute provides an example of such an estimate. His findings:
James K. A. Smith reviews Cass Sunstein’s Valuing Life over at the Comment magazine site. It’s a worthwhile read for a number of reasons, not least of which is that it should move Sunstein’s latest up in the queue.
It seems self-evident that everyone should favor “good” regulation, but the trick is getting some consensus on what defines “good” vs. “bad” regulation. A “people” or “person” centered regulation is a good starting place, perhaps. Or as Smith puts it nicely: “Regulation is made for people, not people for regulation.” Maybe what we need is a personalist revolution in regulation, to say nothing of governance more broadly. A political economy for the people? Yes!
I would insist on some clarifications, though, and note that regulators are often the ones most inclined to get that formula mixed up. Who, after all, will regulate the regulators? (I think the rapper Juvenile asked something like that.) So one distinction I would insist on is that the rule of law is not reducible to or coterminous with the minutiae of regulation. In fact, the latter can often conflict with, rather than support, the former.
I have spoken in the past in favor of net neutrality, writing,
Whoever is responsible for and best at enforcing it, net neutrality had this going for it: it was a relatively stable, relatively open playing-field for competition…. [T]he fact that companies tried to get around it via copyright protection privileges shows that it was, in fact, doing something to enforce freedom of competition. Now, without it, there is an opportunity for concentration of power…. As [Walter] Eucken illustrated, concentration can lead to instability, and instability leads to popular calls for state regulation, which tend in practice toward cronyism. Certainly, such a trajectory is not inevitable, but it is now more likely, giving good reason for pause at the idea that we do not need net neutrality — or something like it — in the future.
This week, House minority leader Nancy Pelosi voiced her support for net neutrality as well. So why would I object? Because the measures that Pelosi proposes give much more power to the government, following the trajectory outlined above in the direction of over-regulation. (more…)
“Politics makes strange bedfellows,” said Charles Dudley Warner. And nowhere is that more true than in the political alliances that form around regulation.
In a 1983 paper, regulatory economist Bruce Yandle coined the catch-phrase “Bootleggers and Baptists” for the observation that regulations are often supported by peculiar alliances who have very different end-goals in mind.
Yandle explains the Bootleggers and Baptists theory of regulation in this video by LearnLiberty.
(Via: Art Carden)
On-demand ride-sharing services such as Uber and Lyft are on the rise, allowing smartphone users to request cab drivers with the touch of a button. But though the services are popular with consumers and drivers alike, they’re finding less favor among their taxi-company competitors and the unions and government bureaucrats who protect them.
Calling for increased regulation, entrance fees, and insurance requirements, competitors are grappling to retain their privileged, insulated status. In Miami-Dade County, an area with particularly onerous restrictions and regulations, Diego Feliciano, president of the South Florida Taxicab Association, argues that the change is bound to “ruin the very thing it’s trying to improve,” all because it threatens the fat cats who pay his salary, and who can afford to jump through the regulatory hoops. “When looking at new technologies,” he writes, “we must also be sure people’s basic civil rights and the safety of the riding public are protected.”
Bringing these petty municipal battles into the limelight, actor Ashton Kutcher, an early investor in Uber, recently appeared on Jimmy Kimmel Live, decrying “antiquated legislation,” “old-school monopolies,” and “old-school governments” who continue to stand in the way of innovation and consumer demand. In areas like Miami, Kutcher says, there is a “Mafioso mentality” against letting the “new guys” in.
Indeed, as Miami’s Feliciano aptly demonstrates, the protectionist mindset only sees what is, viewing economic activity in static and self-centered terms, and failing to recognize or value the type of opportunity and possibility that comes with increased freedom and ownership. Feliciano claims that he’s interested in “safety” and “basic civil rights,” but the only folks being protected are those with power and pocketbooks. (more…)