regulation is not the problem


Some people say regulations are bad because they hurt businesses. This is a stupid argument. And I’d like to take a moment to explain why.

Let’s start by reflecting for a moment on some of the things out there that “hurt businesses”:

Minimum wage. Minimum wage hurts businesses because it increases costs. Every year, there are small businesses that fail because their employee expenses are too high. Every year, there are hundreds and thousands of potential small business owners who think, “I have everything I need to start my new business and achieve the American dream… except, I can’t afford to pay people!” Minimum wage therefore keeps new employers out of the market, prevents the economy from growing, and keeps unemployment high. Minimum wage is therefore bad.

Plumbing. Did you know it is illegal to have your employees work in a large factory building that has no plumbing? Even if, I might add, they do not require plumbing in order to perform the function that they were hired to do! Just as with minimum wage, requiring plumbing in buildings with employees keeps costs high, prevents new owners from entering the industry, and therefore slows the economy and keeps unemployment high.

Laws against slave labor. The same arguments apply here as they do with minimum wage. You get the idea.

Sounds like satire? You think I’m not being serious? Try this one out:

Being able to clean up your own mess. If your business causes an explosion or a toxic leak that devastates miles of the surrounding country-side, you shouldn’t be forced to pay for the clean-up. Clean-up is expensive. Just think of all of the small business that could go out of business if they are forced to clean up a mess like that. Just think of all of the potential small business who would open up (employing people and growing the economy)… but can’t, because they would not be able to afford if they had to clean up a disaster that they caused. Clearly, asking companies to pay for the clean-up of messes they cause keeps costs high, prevents new owners from entering the industry, and therefore slows the economy and keeps unemployment high.

This is exactly the argument used by Republicans in congress, who argued against raising the liability cap for oil companies in the case of disasters. The argument was the same argument that everyone is used to: safety is expensive, small companies can’t afford safety, therefore safety is bad for small businesses.

Oh, I’m sorry, I mean “regulation”. Their argument is that “regulation” (not “safety”) is bad for small business.

There is something slightly twisted about the argument that we should be facilitating oil companies that are large enough to cause massive ecological disasters but not large enough to afford to clean them up. To me, that sounds extremely similar to the “examples” I gave above, about why minimum wage and plumbing are also bad for business. What about the poor companies that can’t afford them?

“I am a sane and rational person,” you may say, “And I know that some safety regulation is needed. But I’m talking about all of the obstacles, all of the paperwork, all of the unnecessary expense that government regulations usually bring to the table! THAT is what I mean when I say that regulation is bad!”

If that is how you feel, then I agree with you.

But I would ask you, humbly, to be more accurate with your wording:

Based on what you just said, you are NOT really against regulation. You are against bureaucracy. And that is an important difference.

The difference is important because it changes the way you solve the problem. It may very well be the case that most (if not all) cases of government regulation go hand in hand with government bureaucracy. But the solution isn’t to give up regulation–and say “awe, shucks, too bad” to safety standards as a result. The solution is to improve regulations so that they are not bureaucratic.

Repeat it with me one more time: regulation isn’t the problem; bureaucracy is the problem.

Because the fact that regulation is expensive isn’t an argument against regulation. Running a business is expensive. If you want to minimize your expenses, then you shouldn’t run a business at all. And if you want to run a business, you have to pay the necessary costs. And that includes the cost of providing for your employees and making sure your product and manufacturing conditions are safe. It means you have to pay the expenses necessary to run the business right.