Tuesday, April 8, 2014

The Amorality of Overregulation

The tyranny of the ruling class is one thing. The tyranny of overregulation is quite another.

The first can be solved by removing the ruling class. The second cannot. Overregulation is like a hydra: cut off one head and two grow back in its place.

In one sense it is good to follow rules. An orderly society cannot exist if people do not follow rules. And yet, as attorney Philip Howard has been at pains to demonstrate, too many rules and too much regulation stifle economic activity. Worse yet, it absolves people of responsibility and stifles the free will that sustains good character.

Of course, overregulation is make-work for bureaucrats. It is their reason for being.

Legislators also like overregulation. With the best of intentions and the worst of common sense they want to show that they are preventing bad things from happening.

Try questioning a regulation that is supposed to be saving the environment or helping little children or protecting middle class investors. You will immediately be attacked as a polluter or a bigot or a thief or worse.

Reviewing Howard’s most recent book, Stuart Taylor summarizes the basic concept:

In "The Rule of Nobody," Mr. Howard shows how federal, state and local laws and regulations have programmed officials of both parties to follow rules so detailed, rigid and, often, obsolete as to leave little room for human judgment. He argues passionately that we will never solve our social problems until we abandon what he calls a misguided legal philosophy of seeking to put government on regulatory autopilot. He also predicts that our legal-governmental structure is "headed toward a stall and then a frightening plummet toward insolvency and political chaos."

This has produced a moral calamity, a systematic undermining of moral responsibility and individual judgment:

But he warns that the "cumulative complexity" of the dense rulebooks that prescribe "every nuance of how law is implemented" leaves good officials without the freedom to do what makes sense on the ground. Stripped of the authority that they should have, he adds, officials have little accountability for bad results.

Over the years Howard has offered a myriad of examples of senseless regulations. Taylor presents a sampling:

After a tree fell into a stream and caused flooding during a winter storm, Franklin Township, N.J., was barred from pulling the tree out until it had spent 12 days and $12,000 for the permits and engineering work that a state environmental rule required for altering any natural condition in a "C-1 stream." The "Volcker Rule," designed to prevent banks from using federally insured deposits to speculate in securities, was shaped by five federal agencies and countless banking lobbyists into 963 "almost unintelligible" pages. In New York City, "disciplining a student potentially requires 66 separate steps, including several levels of potential appeals"; meanwhile, civil-service rules make it virtually impossible to terminate thousands of incompetent employees. 

Overregulation strips regulators of their discretion. They cannot apply the rules as they see fit, to the situation at hand. Theirs is a one-size-fits-all world where human beings have been reduced to nobodies, as Howard suggests, and where the moral basis for economic activity has been diminished, even repressed.


Sam L. said...

And it makes a lot of people cynical and willing to ignore those regulations.

David Foster said...

If regulations are too specific, then government becomes rigid, inefficient, and sometimes pretty close to insane. If regulations are too general, it opens the door to acts of administrative tyranny, petty or otherwise.

Way back in 1969, Peter Drucker observed that "every government is, by definition, a “government of paper forms.” This means, inevitably, high cost. For “control” of the last 10 per cent of any phenomenon always costs more than control of the first 90 per cent. If control tries to account for everything, it becomes prohibitively expensive. Yet this is what government is always expected to do.

The reason is not just “bureaucracy” and red tape; it is a much sounder one. A “little dishonesty” in government is a corrosive disease. It rapidly spreads to infect the whole body politic. Yet the temptation to dishonesty is always great. People of modest means and dependent on a salary handle very large public sums. People of modest position dispose of power and award contracts and privileges of tremendous importance to other people–construction jobs, radio channels, air routes, zoning laws, building codes, and so on. To fear corruption in government is not irrational.

This means, however, that government “bureaucracy”— and its consequent high costs—cannot be eliminated. Any government that is not a “government of forms” degenerates rapidly into a mutual looting society."

From which I conclude: the expansion of government into all aspects of human life leads to increasing inefficiency–while the increasing frustration with bureaucracy results in a widespread demand to “make government more responsive” by giving more discretionary authority to administrators and to their political superiors. This is exactly what we are seeing with Obamacare, with the emphasis at present being on an increase of discretionary authority for the political superiors of the administrators. This, in turn, must result in a government which is not only a looting society (Obamacare waivers or special privileges for politically-well-connected groups, for example) but increasingly a tyranny. Yet at the same time, there will still be enough baroque proceduralization (selectively enforced) to ensure high levels of inefficiency and very high government administrative costs. And the discretionary authority–the movement away from a Government of Laws and toward a Government of Men–must create widespread uncertainty and, consequently, equally widespread economic damage.

More at my post The Procurement/Bureaucracy Excuse, and The Drive for Expanded Presidential Power:


Ares Olympus said...

C. S. Lewis offers something of the predicament, although suggests "morality" is a part of the cause, rather than amorality.

Like regulating soda cup sizes is for the "good" of the glutton, who wants freedom of choice, while it certainly seems amoral to the 700% markup price profits of movie concessions and convenient stores.

"Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience." - C.S. Lewis

Soviet of Washington said...

It's even more fun when you have to work on projects that ship all over the world. US regulators have nothing on the EU and China is coming on fast as well.

Anonymous said...

1. A Navy chaplain told me that when social order weakens, more official oversight and supervision is required.

It seems to make sense, but as Peggy Noonan recently observed, our Leaders are weak (and worse).

They covet power, riches, and fame (Wall St.; corporations; government; academia to name a few).

"Little people", the public weal, ethics, probity. and reverence for our hallowed liberties are forgotten.

Isaiah Berlin wrote of Negative Liberty - The right to be left alone. A law professor wrote in WSJ the other day that by age 18, every American has unknowingly broken one or more Federal Laws. -- Rich Lara

Anonymous said...

Ares Olympus:

What you're calling "morality" is nothing of the sort. It's simply control. Morality is based in reason and a desire for universal good. Control is based in personal preference masquerading as a public good. It's narcissistic.


Ares Olympus said...


I think that was Lewis's snarky point, but its still morality. Paternalism is control AND morality, a world of "right" and "wrong" and the fear that if too many people follow the wrong path, social order will fail, perhaps like our skyrocketing healthcare costs.

Or you could say "Morality is what I believe is right." and "Control is what other people believe is right." if that makes you feel better.

DrTorch said...

Shouldn't this be "immorality" instead?

Interesting that the Ten Commandments do a pretty good job of setting rules, even w/ 963 pages for details.

Anonymous at 4/9- There is a textbook on lit of W. Civ that argues that all of mankind's struggle is addressing that.