Hi, I recently had a respectful argument with a guy in my dorm about regulation. He insisted that even though the government is often inefficient in regulating corporations, that it is still preferable to deregulation and that the benefits outweigh the costs. He said that without clean air and water laws, that he would have had a 50/50 chance of living or dying by his age (18). I responded as best as I could, but I would love some advice on how to respond. Data and real historical examples to support my argument are preferable.
benefits outweigh the costs.
How do you quantify the benefits and the costs?
He said that without clean air and water laws
Wouldn’t be an issue if private property laws were taken seriously.
50/50 chance of living or dying by his age (18).
Ask him to stop making up silly statistics. Ask him to discuss honestly. If he is correct he doesn’t need to lie.
I agree with you, and mentioned these points briefly, but I’m looking for concrete articles and studies about the bad effects of regulation. I used the fact that more people die from the FDA delaying the release of effective drugs than who would otherwise die by the release of “bad” drugs, which he conceded was an example of harmful regulation. I’m looking for stuff like that. Thank you for the reply.
There are literally thousands on this webpage alone.
Try this google string in your search
site:mises.org effects of regulation
I have been searching google as well as mises in particular. I also contacted Tom Woods personally via email and among other things, he directed me to this site to ask my question. I’m trying to get as much information as possible.
Your in in a great place. Keep searching. If I come across any particularly interesting pieces I’ll post em here as well. 
Thanks filc
I would ask him to show that environmental socialism actually had the desired effects, because I think a lot of statists are just assuming that without ever bothering to check whether it’s actually true. I mean, pretty much everyone has to admit these days that government planning failed miserably at providing efficient industrial production, so why do people just assume that the same model is capable at providing a clean environment? My belief is that environmental socialism has not caused the improvement, but has simply gone along at the same time, so everyone assumes that it must have caused those improvements. But that is a mistake, the only thing that has ever improved the environment is wealth, and wealth comes from having free markets. Water and air are cleaner today because we are more productive and therefore richer, so we can afford the luxury of cleaning up our act. That has nothing to do with government banning pollution, but with having more capitalism, more machines and industry, not less. As far as I know only free market capitalist countries have a clean environment, socialist countries are dirty hell-holes. So the empirical evidence supports my case: Environmental improvement comes “by itself” in a free market economy, regulation is actually generally counter-productive, because it makes us poorer and therefore less capable of producing a clean environment. And because regulation monopolizes the market and big companies that are protected from competition can more freely pollute than small companies in a competitive market. But your friend will have to learn a bit of basic economics before he can understand issues such as this one.
Nero, I totally agree, and even cited the atrocious environmental record of the Soviet Union (he responded by saying that he isn’t Communist and that there was no third party to regulate. I guess he thinks if there are both corporations and government regulating, then things will be better.) I’m actually wondering if there is any data out there about the trends in air and water quality before laws were passed regarding them. Leftists often distort stats to fit their argument. For example, the workplace fatatilty rate fell at the same rate prior to the creation of OSHA as it did after the creation of OSHA (i mentioned that to him earlier in our argument and he responded by saying that only happened because of government reforms during the Progressive Era), yet we only hear about how it fell after the creation of OSHA.
The Communists had an atrocious environmental record, yet the Nazis were the first political party with a thoroughgoing green agenda, they practically invented environmentalism. These “liberals” should ask themselves what side of their political spectrum they are on, lol.
I thought about how we can argue with these people before, because they pretty much got an unfalsifiable position there. If we show how an improvement could not have been caused by the regulation they say, because the improvement actually precedes the regulation, then they just claim that the improvement was caused by some other piece of regulation or some reform era. If everything else fails they just point to the Progressive era. It is impossible to argue this point using examples, we have to attack the core belief that social engineering necessarily has the desired results. These people assume that social engineering always has the desired effects, i.e. that intentions must equal results, because that’s all they were taught in school. The very possibility of spontaneous order is not on their minds. Thus when we point out how a particular social engineering project failed, it does not change their core belief.
To attack that belief we have to explain how spontaneous order works and how improvement happens by itself in a free market, not through social engineering. That would be the theoretical basis. Secondly, we can point out that all the empiric evidence is on our side, and none of the data really fits their case. For one progress usually precedes the movements that claims to have caused it, but also we just have to take a look at the world. If social engineering is the way to get progress, then why is it that free market capitalist countries are the richest, have the cleanest environment, lowest birth rates, etc.? Shouldn’t countries with more activist governments, like those in Africa or China, that actively attempted to achieve those ends using “regulation”, be the richest and cleanest? If progress is caused by meddling, why is it that progress is directly correlated with how laissez-fair a society is? Yet they just discard that evidence because apparently the social engineering projects of China of Africa were not well-intentioned enough. They didn’t work, so they don’t count.
They might argue that government regulation mandating mpg on cars increased average mpg at a time when car companies would not have done so by themselves.
Nero, great post. The problem with this guy is he admits government regulation is often inefficient, does not reach intended results, and that the regulators often get in bed with the industry they regulate, but he still holds that it is better than the alternative; without it, apparently, we’d all die of dirty air and water or what not. I assume if I pointed out that the relatively free market countries have better environmental records, that he would respond by saying this wouldn’t be the case if it weren’t for regulation in those countries.
Wheylous, why didn’t the car companies do that? Because there was not enough consumer demand to justify it. Consumers valued other things more than MPG. These requirements have a cost, and that includes higher prices for the vehicle, lower wages and fewer jobs for workers, lower dividends for shareholders, and more dangerous vehicles (companies often meet these requirements by decreasing the weight of the car, which leads to more fatalities).
The simple answer to your problem with this gentleman is thus: That firstly he is not really adressing regulation as such, but rather pollution controls. These could easily be dealt with on a free market, the very fact that he would have experienced bodily harm is a testament to the fact that it is a violation of property rights and could therefore be dealt with by local enforcement by courts. Regulation doesn’t have to be performed by the government, see the beliefs of the anarchists. With all of that being said the government would just need to say “you cannot pollute with harmful substances” and then the problem would be solved. No need for any of the agencies except a small scale to ensure taht there is no pollution going on.
Show your friend Jevon’s paradox. The idea is pretty simple: assume that an improved use of a resource leads to reduced consumption of the resource. Illustrate by Supply and Demand curves how the improved use (efficiency) reduces the price of a good which increases the demand, therefore errodes all efficiencies and initially reduced consumption. Proof? Wheylous referenced federal MPH regulations; this is considered de facto proof by even mainstream economists as to the absurdity of efficiency regulations (be it fuel efficiency regulations, energy-star, etc).
Because there was not enough consumer demand to justify it. Consumers valued other things more than MPG. These requirements have a cost, and that includes higher prices for the vehicle, lower wages and fewer jobs for workers, lower dividends for shareholders, and more dangerous vehicles (companies often meet these requirements by decreasing the weight of the car, which leads to more fatalities).
That’s what the reasonable person would say, but he would just say that we must force people for their own good.
Not Jevon’s paradox:
The Jevons paradox has been used to argue that energy conservation is futile, as increased efficiency may actually increase fuel use. Nevertheless, increased efficiency can improve material living standards. Further, fuel use declines if increased efficiency is coupled with a green tax that keeps the cost of use the same (or higher).[3] As the Jevons paradox applies only to technological improvements that increase fuel efficiency, policies that impose conservation standards and increase costs do not display the Jevons paradox.
So you need another argument as well. Perhaps saying something about the restriction of personal liberties.
His problem is that even though he admits to the inefficiencies of government regulation, he can not imagine how environmental improvement could have happened by itself. You have to explain how spontaneous order works: Environmental improvement is a side-effects of wealth. Firstly, as people get rich they will prefer a clean environment. That’s why countries always clean up their air and water once they hit a certain per capita income. And it’s not because they enact regulation at that point, if people want a clean environment, then there’s some way to provide it without force. In the end clean air is a good like any other. Secondly, technological improvement leads to cleaner resource use. Oil is cleaner than coal and natural gas is cleaner than oil. This progress happened in free market countries because of the profit motive, and did not happen in socialist countries. So environmental improvement is a side-effect of capitalism. Government regulation to improve the environment has, by making us poorer and monopolizing the market, only been counter-productive.
C.A.F.E. standards killed more people than 9/11… every year. It’s among the most detrimental regulations ever enacted.
Wheylous, the problem with examples like these is that statists aren’t counting the full cost of regulation. Those costs are usually opportunity costs and therefore they are unaware of them. If you count all costs then the net effect of regulation is always detrimental.