balanced regulation
On this date in history, Adam Smith, author of The Wealth of Nations, was born.At least, we think it is. His birth was registered on 5 June 1723, so it's likely to have been a couple of days earlier. He was raised in Fife, Scotland, by his widowed mother, to whom he remained devoted. He never married, and after his mother died, an unmarried cousin looked after him: he was so steeped in the world of ideas that someone had to.The Adam Smith Institute also has a blog that focuses on various issues that pertain to ‘free markets and free societies’. The category of posts entitled Regulation is particularly insightful. In a recent post by Dr Madsen Pirie, Not all regulations are equal, a common sense solution to irrational regulation is suggested.
Our civil servants famously insist on enforcing all regulations. We gold-plate directives from the EU, so they affect us more than other member states.More often than not, libertarians are accused of advocating the complete elimination of regulation. This may be true of some, but the majority of pro-capitalism, limited government types recognize the need for objective standards, a rule of law, by which all are governed in equal measure. It’s when there are no rules that the weak are exploited by the strong. More importantly, without universal standards in a particular society, competition, productivity, efficiency and wealth creation are virtually impossible.
It is obvious, nonetheless, that some regulations matter more than others. It might cause concern to have 5,000 gallon fuel containers stored next to primary schools, but the risk caused to us by someone selling cheese by the pound instead of the kilo is minimal.
As a first step to sensible regulation we should grade all regulations. The ones which put life and limb at risk should be designated as grade-1, whereas those which hardly affect anyone should be given grade-5.
The problem of regulation, that free marketeers lament, arises when politicians pander to various constituencies whose agenda is thwarted by unencumbered capitalism; whether it’s left-wing environmentalists that protest development or right-wing corporate boards that fear increased competition from innovative new comers. In short, excessive regulations have become a tool of special interest groups, used to preserve the status quo and/or to further their goals. The same can be said of all manor of moralistic legislation as well. I’m not opposed to limited rules and regulations…it’s just those of a ‘social engineering’ sort that I detest, regardless of the political bent.
posted by Robert @ Friday, June 03, 2005
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