(intro until 2:40)
regulation is a good
idea in theory, no doubt. if those who created the regulations a) understood every in and
out of the sector they were regulating, b) understood the exact pros and cons of the
effects of the proposed regulations, c) were... unable to be affected in any way by outside
(moneyed) influence and were unable to hide behind the walls of the state, etc, then it
might work great. the problem, though, is that regulation has been "weighed in the balances
and found wanting". it almost always has the inverse effect of the well-intended solution
it is perceived as.
regulation in the economic sector usually solidifies monopolies. they are corporate
monopolies, and there are usually 2 or 3 dominant corporations in the sector so as to give the
illusion of choice. this is why many (actually, probably most) times, corporations themselves
are behind the regulations; it gives big money unfair advantages backed by violence. if Perdue
or Tyson want to limit competition, they get a law passed that all chickens have to go
through a laundry list of cost-prohibitive "sanitation" exercises, mountains of paperwork,
expensive industrial licenses, etc. this has the effect of walling off any free marketeers
(little guys) that might be able to come in and undercut the big boys. of course, Big
Chicken itself is never held accountable to those regulations. and of course, without
the regulations, the people themselves could vote with their dollar; if Little Guy Chickens
makes a great product, it competes with Big Chicken and
the people win.
you can eliminate lobbying, but there's still going to be the buddy system. Citi asks Smith
to put X restriction on banking, and 4 years later, Smith becomes the CEO of Citi and reaps
the reward. the fact is, regulations on ANY (non-criminal) actions in the economic sector
do not work better than regulation by us little guys via the dollar, and in fact usually work
against him.
now, talking about the possibilities in the absence of regulations is where it gets most
interesting IMO. there is an important distinction to be made here between regulations and laws
(the words can be used interchangeably, but ...I'll draw a hard line for the sake of discussion).
laws establish principles like "it's illegal to hurt an innocent people". regulations,
well, regulate the way business is done. I certainly agree that the former is necessary
and required. the latter, though, I am asserting is better left to the "market", or the people.
now, companies can lie in advertising, but the greatest agent of regulation in a free
market - their competitors - will call them out and ruin their reputation (except they
can't do this as it is due to FCC regulations). they can lie about what they sell you and
whether it's dangerous, but they will be taken to court, sued out of existence, and imprisoned
for life for fraud (violation of implicit contract) and injury - this of course only
possible without the government status/protection of "corporations".
companies can build crappy buildings, but they will be liable for injuries and will
have a crappy reputation to go with it, so it is in their best interest to build a good
product.
companies can intentionally make crappy/faulty cars, but without their limited liabilities,
the same things will happen to them. the principles above hold true over and over again. however,
when the state creates regulations that only ten people can die per million cars sold,
then the corporation aims for that number instead of 0, and their actions are legitimized.
my main point here is that the state provides protection for the rich in almost everything
it does, and regulations are an agent
of the state.