I’ve noticed that the pundits are always very excited to debate deregulation with “libertarians” and libertarians (though they rarely talk to real libertarians-without-quotes). Whenever the pundits are excited to debate something, it always makes me suspicious because they are never excited about a debate unless it is on their terms.
So, what is wrong with arguing for deregulation? Well, the fact is that in most of the areas where libertarians are calling for deregulation, the government has monopolized the regulatory function. This means that if we shut the government down in these areas, there really would be chaos until a market could develop, which would obviously take time. If we woke up tomorrow and there was no SEC, no FDA, no Federal Reserve, no police, and so on, the whole nation would be plunged into serious chaos. By engaging the pundits on their own terms, we are granting them the power to draw a caricature of our position. “You are just anti-government (for some unholy reason we and our viewers cannot possibly fathom) and because of this, you would be happy to see all of society go up in the flames of anarchy and chaos just so you could have your perfect little government-free world!”
The fact is that - while we are opposed to the production of any good or service through the forcible collection of revenues (taxes) - we must admit that as a consequence of the monopolization of many regulatory functions within the economy, the market’s ability to regulate those functions has atrophied or withered altogether. This means that an orderly transition to market production of such regulatory functions must come about not as a result of a total shutdown of government regulation but as the result of de-monopolization of the government’s regulatory capacity. In the case of money production, we do not simply want to “End the Fed”, we want to open the market to currency competition and permit banks to opt-out of Fed regulation in favor of other, market-based systems of evaluating and certifying reputability. The same goes for all other regulatory functions - FDA, SEC, public police, and so on. We don’t simply want to abolish them overnight - the results of such a foolhardy course of action are obvious. Once the market has strengthened and is capable of producing the regulatory function which government was once producing, we want the government’s production capacity either completely privatized or shut down. It must be de-funded from tax revenues because the forcible collection of revenues is simply stealing and wrong.
We need to stop accepting the “deregulation” debate and start insisting on a “demonopolization” debate instead.
Clayton -
So you’re using deregulation here as meaning total deregulation? Because then yeah I can see what you’re saying.
The big problem is licensing. Alternatives are simply not allowed to exist. Want to be a doctor? → have to join the monopoly. Want to be a hospital? → have to join the monopoly. Want to license hospitals and doctors? → illegal.
Want to make this your second blog-post?
Exactly, and this is what I think our focus should be. I have no idea how much regulation or certification or other secondary reputation-verification functions are required in each market so it is disingenuous for me to argue that “the government monopolist regulator should be regulating less.” This is the trap that the pro-central bank types were luring anti-central bankers into after the beginning of the 2008 economic crisis. “Oh, look, you guys keep calling for less and less regulation but look how these shysters were able to manipulate the system in the wake of deregulation.” Even if it is true that hot, inflationary cash was the ultimate cause of the collapse, it is disingenuous to claim that there was sufficient regulation of the financial markets when financial corporations were blatantly taking advantages of blind spots in the regulatory rules.
But the debate is not about what should the rules be. I have no idea how to regulate a financial market so I have no opinion on how to set the rules for a financial market or if there are too many or too few rules and it is disingenuous for me to express my opinion on the subject. However, I do know that if consumers of financial services are not free to choose between competing certifiers of financial integrity, abuse and corruption are inevitable. So, the problem is not how much or how little businesses are regulated. The problem is the monopolization of the licensing in the first place.
Clayton -
The word “regulation” essentially is an accurate description of what is presently done: forced perpetual uniformity and conformity. The only kind of valid description for a free system is “certification” or equivalent. If you want no innovation and no alternative you want “regulation”. If you want product classification for shoppers you want “certification”. The ominous character of “regulation” comes ready with the implication of central planning.
It is about what the rules should be. There should be no rules particular to any product. The people that argue for “regulation” want to make rules about what you can do. Certification is not rules about what you can do. A license is a permission, not a certification. These words are important. “Regulation” and “license” are bad. Certification or professional association is good.
Clayton, I completely agree with you. I am especially excited to read what you have written because I was arguing this exact point 4 days ago on another forum (a writers forum, but someone had started a thread on the debt ceiling and I couldn’t help myself).
Like you (sorry if I am putting words in your mouth) I believe that capitalism has grown unhealthy as the government has replaced the need for responsible customer and employee action. While in free capitalism the customer and employee have an active role in shaping the economy and business structure through negotiations with companies, government has nowadays weakened their teeth by doing everything for them.
Take government-backing of unions for example. By legislating and enforcing union decisions, the government invalidates the need for union strikes/boycotts, which are parts of healthy capitalism.
I find that a point that many people like that I make when I argue libertarianism is that super-capitalistic people (truly super-capitalistic, not simply pro-business) actually are cool with unions. Unions are an inherently capitalistic construct. Indeed, the first unions (see Knights of Labor) didn’t want government action but wanted to themselves work to buy up the means of production and create a sort of coop. The Grange did this as well. The union is actually one of the biggest pieces of evidence that capitalism *works.* Why? Consider the big bad Industrial Revolution. Privately owned big businesses are a relatively recent thing (ca 1860, correct me if I’m wrong). Given their sudden rise to oppress the poor common man, the response of the capitalistic system to fix itself (through creation of unions and boycotts) was lightning-fast. And unions would have done well had the Sherman Act not been used against them and had government regulations not made them complacent.
But I ramble.
Well, while I’m at it, to ramble some more.
The government should first say “we will be completely deregulating internet companies by 2030” (or some date)
Why? I see the Internet as one of the biggest helping hands for libertarianism because it empowers the customer and employee. The Internet can help society come together to support new private licensing companies (etc). By announcing the deregulation of the Internet, society has enough time to either negotiate a good internet policy with companies or to create some new company. This way, when other industries get deregulated, there is a free internet (not in cost but in freedom of ideas) to help the public get the teeth they have lost.
Then they begin to deregulate other businesses (simultaneously).
The problem with this line of thinking is that it relies on the government to reverse course. As always, the real battleground is the battleground of ideas.
Autolykos: Of course you’re right and I don’t mean this as a policy recommendation. My point is that we need to deny statists the “deregulation” talking point by refusing to accept the premise that we are in favor of reduced regulation. We don’t want reduced regulation. We want the government to wither away. One way it could do this is to stop prohibiting other private entities from competing with it. Of course, it will never do this as a voluntary cession of its own power. But that doesn’t mean that if we spread the idea in the public that the public wouldn’t come to demand it. The government would rather cede power in a particular sector to stay in power than lose power altogether. But if the public doesn’t even know to demand this, then the statists can continue to snow the discussion with the “deregulation debate.”
Clayton -