wealth definition

Moving students past the “there oughta be a law!!” reflex

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“Government exists to protect us from each other. Where government has gone beyond its limits is in deciding to protect us from ourselves.”

— Ronald Reagan

Can students, and the public, ever move beyond the sentiment that “there oughta be a law”? Is it possible to break that easy and unfortunately comfortable habit of demanding increased regulation at the first sign of any environmental problem?

The short answer is, yes, but it requires some work to understand the reasons for making rules, what regulation can (or does) accomplish, and how it can be abused or overused. That is the purpose of this second post on moving students past the “there oughta be a law!” reflex. Click here to read the first post in the thread.

The Regulatory Transparency Project, a nonprofit that describes itself as an “effort dedicated to fostering discussion and a better understanding of regulatory policies,” explains that government has two main tools to make private resources serve public goals: spending and regulation. Government spending uses tax dollars to advance specific policy objectives. Regulation has historically been viewed as a less controversial and, therefore, better way to achieve policy goals.

In his 2012 paper, “What is Regulation?,” Barak Orbach discussed several definitions of the term, including one found in National Federation of Independent Businesses v. Sebelius, a major Supreme Court ruling that upheld key parts of the Obamacare law.[1] In their ruling, the dissenting justices held that the power to regulate entailed “direct[ing] the manner of something but not … direct[ing] that something come into being.” Orbach also cited Black’s Law Dictionary, which defines regulation as “the act or process of controlling by rule or restriction.”[2] He also described how regulation is used as a tool “to control, govern, or direct,”[3] to enable desired actions, or to establish “binding legal norms” to shape the conduct of citizens and businesses.

In its 2017 report, “Government Regulation: The Good, The Bad, & The Ugly,” The Regulatory Transparency Project defined regulation as “the power to coerce,” which is only legally employed by government. The report expanded on this by noting that regulation is often abused by rent-seeking private entities, who are able to meld the complexity of regulation with the power of government to advance their personal interests. Rent seekers wish to gain wealth, limit competing interests, restrict choice, and stifle innovation, all while forcing the costs of regulatory restrictions onto competitors or customers. Finally, the report discussed the problem of regulatory capture, which occurs when lobbying leads government agencies to support or advocate the goals of regulated entities.

The Regulatory Transparency Project also contrasted rent-seeking behavior with profit-seeking business activity. In commerce, private businesses use personal resources in an “attempt to create wealth by discovering and acting on new opportunities.” Contrary to what many critics of private businesses say, people and organizations who seek out their own goals usually bring about “socially beneficial consequences.” Among these beneficial outcomes are more jobs, new products and lower prices.

When government considers a new regulation, the primary conflict is between two desires: maintain liberty and achieve some desired policy outcome, such as maintaining public safety. Orbach cites the views of famed 19th-century philosopher John Stuart Mill.[4] Mill argued that if poison were only used to murder, it would be a worthwhile invasion of liberty to pass a law or regulation that banned its sale. But it is possible to manufacture or use poison for innocent and useful purposes, such as deploying pesticides to help control infestations, or to use snake venom to create medicines that treat chronic pain.

What about the possibility that poison could be used for foul purposes? Mill argued that preventive government intervention — acting before someone commits a crime — is more likely to become abusive than imposing a punishment after a crime. So it’s better to warn about the risks of a poison, such as by putting a warning label on a bottle of it, than to forcibly prohibit its use on the grounds that something could go wrong.

The problems arising out of the reflexive cry that “there oughta be a law” are highlighted by two of the concepts discussed in the first post in this thread. First, it may not always be possible to develop a single right answer to every policy challenge. Second, better policies will emerge when we engage with, and attempt to understand, dissenting opinions. As Mill noted, prior restrictions more easily turn into abuse than other approaches do. This is because government alone possesses the legal ability to force everyone to use its desired solution. Allowing private parties the freedom to choose, or to contract with each other to achieve their various ends, opens up the possibility of negotiations.

In the next post in this thread, we’ll dig into some obvious examples of excessive regulation to clarify how regulation can infringe on the liberties Mill described.

[1] Nat’l Fed’n of Indep. Bus. (NFIB) v. Sebelius, 132 S. Ct. 2566 (2012)

[2] Black’s Law Dictionary 1311 (9th ed. 2009).

[3] The Oxford English Dictionary 524 (2d ed. 1989).

[4] John Stuart Mill, (1859) On Liberty, Batoche Books, pg. 88



Permission to reprint this blog post in whole or in part is hereby granted, provided that the author (or authors) and the Mackinac Center for Public Policy are properly cited.

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