Blog 9. Is regulation a dirty word?

Imposed ideology?

Regulation is not always an imposition of political ideology.  Most regulation is adopted by governmental agencies such as a city planning commission or the federal Environmental Protection Agency (EPA), supposedly away from elected bodies like city councils, state legislatures, and congress. Regulation– from speed limits to barber licenses or pollution control– is theoretically free from partisan ideology.  That’s a nice theory, but a myth.

We often hear an anti-regulation political speech like “Regulation kills jobs, ruins business, replaces progress with paperwork, and extorts taxes disguised as license fees. Regulation takes away your freedom.”  Sounds fearful.  Fear generates attention, and the attention generates votes.  The elected politicians then bring pressure when appointing regulatory officials.  That’s how politics enters most regulation.  Can a technician in the federal EPA develop a regulation to protect rivers while ignoring political ideology voiced in the Congress that makes laws and sets budgets?

Let’s look at those fearful political assertions regarding how regulation hurts business.  There’s a little truth there, but it’s only half-truth. If a company ceases business because it can’t obey the regulations, that indeed ends jobs.  However, some regulations, like those governing industrial safety and waste disposal, actually create jobs.  Regulation forces a producer to include the costs of worker safety, public health, and environmental protection in the market price of whatever that producer sells, rather than allowing the company to “externalize” those costs onto society.  Regulation prohibits a restaurant or a household from dumping its garbage into the street.  Licenses assure qualified doctors and taxi drivers, clean food in restaurants, and safe wiring in houses.  And it’s totally true that regulation restricts freedom—the freedom to generate bad events, even with good intentions.

Regulation is more than formal law.

We rarely realize that regulation occurs everywhere in daily life. Traffic is regulated. Crime is regulated because without regulations by definition there would be no crimes, only victims. Regulations govern marriage, schools, medicines, food, water wells, buses and airplanes and pilots. Those are examples of the obvious, on-paper, legal regulations. But there’s a larger picture. Much larger.

Regulation is the culture.

How we interact with each other—the unwritten rules of meeting and greeting, agreeing and disagreeing, dating and mating, buying and selling, sharing and caring—all of culture is an informal regulatory system without which humans would be solitary hunter-gatherers. Peaceful interactions with other persons inherently restricts freedom. Regulation, and its restriction of absolute freedom, is not something that occurs only in the offices of government agencies. In any society, the informal rules of expected behavior are a form of regulation. A rule may be so trivial as where to place the fork on the dinner table, or how to eat soup with chopsticks, but these rules are important within the society. When you first travel outside your own culture you may feel uncomfortable, not knowing how to behave, not knowing the rules.

Another country might have customs of bargaining rather than fixed prices in stores. Governance might occur through graft or familial seniority rather than by statutes. A country might have little effective regulation of traffic, safety, health, or environmental protection. Nonetheless, informal rules and customs regulate the local behavior. With rules varying by country and by culture, the U.S. finds it difficult to apply our regulations to products imported from countries where the workers and the environment are expendable, temporarily allowing cheaper production.

Regulation requires consensus.

Effective regulation requires consensus. A visiting girl came from a small country where unrestrained auto traffic resulted so many crashes that wealthy families hired low-level workers to do the dangerous driving. “Why don’t you have stop signs,” her host asked. “Because nobody would obey them,” the girl answered. A culture that ignores its formal rules may have a governance that runs by corruption, where authority and justice are purchased. To the extent this is accepted by the people, the acceptance is a form of consensus.

What’s the difference between the U.S. and a country with few formal regulations? History, in part. The U.S. was formed by people seeking political and religious freedom. Most other colonies were formed (or captured) by people seeking wealth. We endanger our own wellbeing when our regulatory authority is determined by money and by corporate ambition, neither of which have inherent social values. If we accept that wealth and corporate freedom exceed other values, that consensus will generate oppressive characteristics in the complexity of our own culture, because the underlying rules of behavior will be the rules of greed, graft, and corruption.

So what?

The message is this: 1) Establish or delete formal regulations by purpose, not by narrow political ideology; 2) Be sure to have rules. It’s all right to rebel against a repressive king, but if, due to our own cultural habit, we rebel against the mere existence of formal regulations, we will again suffer the tyranny of the powerful. The power of unaccountable people is itself simply an insidious form of regulation.