Government regulation – good or bad?

by thoughtfulconservative

I’m as conservative as the next guy (I think) and lean toward libertarianism. This means the usual government regulation and intervention is as odious to me as to most. I regularly make fun of the most obnoxious examples of government run amok.

But what does that mean in two recent cases, the explosion and subsequent belching of oil into the Gulf of Mexico and the financial reform bill? I suppose one could add the Rand Paul flap about the Civil Rights Act to these two.

I’m going to paint in broad strokes here so don’t try to apply my thoughts to every situation.

Was the Civil Rights Act good for America? Should consumers be shaded from shady practices? Does the government have an interest in protecting the environment?

Most thoughtful people would answer yes. I think the difference would come in the extent of government regulation that takes place.

But as I’ve read some of what’s out there, I begin to wonder. Barry Goldwater voted against the Civil Rights Act and Reagan, William Buckley and others were against it. Some are starting to defend Rand Paul for what he said.

Then how do we hold companies accountable for accidents or over-exuberance in their practices in a completely free market as most of my conservative and libertarian friends want?

Then again, once the government feels they need to hold one business accountable, they will feel the need to hold other businesses “accountable.”

And once they feel the need to protect consumers from shady practices, they will feel the need to protect consumers in other ways, for example, raw milk here in Wisconsin.

Is there a suitable middle ground? Is there some other way I’m not seeing?


4 Responses to “Government regulation – good or bad?”

  1. From what I know of the Civil Rights Act (I am Canadian), it may be worth considering it in in two (possibly artificial) aspects. The first would be banning state and local laws that forced discrimination. The second would be the more active banning of discrimination in private activities. I think the federal government was right in the former and wrong in the latter. For the former, the states were obviously infringing on property rights of individuals. For the latter, the infringement actually started with the act, as it now prevented property owners from using that property any way they saw fit (that didn’t violate the property rights of others). Refusing to serve, sell to, or hire members of a discriminated group, although being a reprehensible act, does not violate their property rights and will actually tend to go away on its own. However, since it offends our sense of rightness, we want a solution right now, but such solutions end up violating other rights in the process.

    Consider the situation of, for example, a diner that wished to refuse service to one group (be it based on skin color, epicanthic eyelid folds, religion, sexual mores, or whatever). Obviously, if all diners colluded to the same refusal, it would effect the same discrimination that legislation would have. However, if there was even one diner that did not refuse such service, it would reap all the profits of serving that group. Given that businesses are in place to attempt to reap ever greater profits, there would be intense pressure on all diners to open up their service to said group. It would not be immediate, nor would it be comprehensive, but it would be effective. In fact, given such an opening of diners to the discriminated group, it is hard to envision many scenarios where diners that continued to discriminate against the group would not wither away and die in the long run. The only such situation that comes to my mind would be where providing service to such a group was actually more costly than the group was willing to pay. This is highly unlikely, but even if it were so, forcing the diners to provide service would be a violation of their property rights.

    On the subject of shady business practices, I think I would ask for more specific examples before discussing it further. Businesses are made up of people, and people have been “shady” since people existed, and continue to be every much as shady (if not even more so) in the presence of massive volumes of legislation banning shady practices. It can even be argued that at least some shady businesses practices have actually been enabled by bad legislation. The solution to bad legislation is not more legislation.

    On the subject of the environment and pollution, I have read a couple of surveys recently comparing the effects of land management between smaller groups (ie private ownership or local governments) and larger governments. Sadly, I have not bookmarked any of them so I cannot provide links at this time which admittedly casts doubt on the results I may claim. However, all concluded that smaller groups produced better environmental outcomes than larger governments.

    The classical economic argument for this is that the closer the management of the land is to the owner, the larger a vested interest the manager has in keeping the land valuable. This works if the manager is an owner hoping to pass the land to his heirs, for an owner hoping to sell the land, or an owner hoping to run a business on the land. A government, however, only has the interest in being reelected, and if their legislation gives the appearance of protecting the land without actually doing so, all the better.

    The wording of your question is somewhat curious as well. The government has an interest in everything, if for no other reason than to collect more power to itself. As such the question of government having an interest in X is always yes, no matter what the X is.

    Hmmm, now that I’ve written all that, I found this post on The Volokh Conspiracy which explains at least the basics of the libertarian position. It basically mirrors several points I’ve said above, but with more specific examples from the relevant period.

  2. PS, I would thoroughly avoid the idea of “over-exuberant” in an economic sense. A company cannot become over-exuberant without the assistance of others, and even so not easily without the provision of cheap money (ie artificially low interest rates). Without cheap money, companies can only expend what resources they already have, as acquiring more is costly. Since such resources are both limited and valuable to the business for other uses, this is a natural brake on such exuberance. As such, it is not companies we should hold accountable for over-exuberance, as they are only doing what comes naturally given their economic environment. To quote (and probably mis-quote) another economist: I know not where the next crash will be, but I know who is pressing the accelerator.

  3. Thanks for your thoughts. I’m sorry I can’t answer you in more detail as I was basically just thinking “aloud.” I lean libertarian although I can never fully be one because I at least partially share the goals of some social conservatives.

    Since I was painting in “broad strokes” I wasn’t going to look for any specific examples other than the ones I quoted. I will read the post you linked to when I get time. Thanks for linking to it, it looks like a good one.


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