This year, Mises Institute Associated Scholar Per Bylund released The Seen, the Unseen, and The Unrealized: How Regulations Affect Our Everyday Lives.
No truer words. Mr. Bylund states in part:
“Growth and entrepreneurship in a market is not so much about allocating existing resources within the market as it is about speculating about how resources can be created and used in more valuable ways. The market is a creative enterprise always aiming for the future and satisfying more wants and newly discovered wants. Thus, a governmental regulator or central planner has no data to use in making a “rational” plan because the data doesn’t exist yet. That’s the problem with central planning — you cannot plan with only unknowns and unknowables. That’s also why markets are messy, but decentralized decision-making within a profit-and-loss system generates the very structure needed for such decision-making.”
Never having all the data is why all governmental regulation and central planning should be rendered legally arbitrary and capricious. They are always created in hindsight because regulators and central planners fail to, and cannot reasonably, account how market participants are constantly learning and adapting, the context is ever dynamic. Plus, the remedies for wrongs are already available through such basic maxims as the non-aggression principle. Common law interpretations are often an extension of this very principle and have well-served western culture long before the advent of the nation-state.
Regulation and central planning introduces mass inefficiency and protectionism into the market. They cannot sustainably protect those for whom they were purportedly created. In many ways , every regulation is a “one-size-fits-all” approach. By definition, all regulation curtails choice, and this is almost always ultimately at the expense of the middle or lower classes — the politically unconnected.
Even when regulation appears to specifically restrict the rich — think Sarbanes-Oxley Act of 2002; then the 2008 meltdown; and now, the Dodd-Frank Wall Street Reform and Consumer Protection Act and its Consumer Financial Protection Bureau. These regulatory schemes have done nothing and will continue to do nothing in the protection of consumers other than make the associated products and services more expensive or available to fewer people.
In the case of these acts, if banks and financial institutions were not allowed to commit the theft of counterfeiting through legally sanctioned cartelization under the Federal Reserve System and the practice of fractional reserve banking under the protection of legal tender laws, they never would have been “needed”. There is simply no better regulator than having your own hard money at risk. If these banks were true banks, accountable to their shareholders and depositors, without the protection the Fed and taxpayer-funded bailouts, then again, no regulation would be needed. If more of us would take the time to break it down, then more would see that this supposed protection is not only an exercise in futility, but is actually a barrier to entry for greater market competition and diversity.
And all the while, earned income is redistributed through taxation for the benefit of those who can best afford to influence governmental officials to craft these regulations; then those remaining earned dollars are essentially counterfeited and de-valued again to the benefit of those with early access. And then, the pattern repeats itself until eventually financial collapse ensues. This constant meddling and repetitive cycles of theft are a significant factors in the boom-bust economic cycle which have afflicted modern economies for well over the last century — not surprisingly concurrent with the growth and development of centralized planning and fractional reserve banking.
Politicians and mainstream economists never talk about purchasing power (rather it’s DOW, job creation, interest rates, etc.), and how the above-mentioned practices have literally robbed generations of families of saved income, or deprived legions of everyday entrepreneurs the ability to better realize an idea, or for parents to spend more time raising their children. We need to first think of adhering to first principles — legally and economically, maximizing the purchasing purchasing power of all should be paramount. This is a merely an extension self-ownership through property rights and a cornerstone of true capitalism – not crony-capitalism.
Ultimately, regulation curtails choice, and choice is nothing other than power. So when you think that governmental regulation doesn’t directly affect you because you are not in that industry or that part of the country, think again. All people, products and services are interconnected. Regulation and central planning does not operate in a vacuum. Those products and services directly affected will ultimately be more expensive, reduced in availability and diversity; thereby decreasing your total choices and value to a wider array of customers.
And, what may be worse?
If these products and services are more basic in nature, then rest assured that other products and services which rely on these underlying components will be negatively affected as well. It doesn’t take a great deal of foresight to see that the system becomes fouled.
And for what?
For the arbitrary and inequitable redistribution of wealth; all of which is principally directed by government that is ever-nurtured and influenced by special interests primarily paid for by the un-connected working class.
Mr. Bylund makes many more excellent points about regulation and central planning. But more deeply, in searching for a sustainable solution to this sort of oppression, we really need to ask ourselves just exactly how far are we willing to go to solve this systemic dilemma with government. Because simply, government is synonymous with regulation. The problem with just being satisfied with a simple reduction in regulation never guarantees that the tide will not turn once again — to fight the battle again — all for the very same reasons that it plagues us today.
We need more openmindedness to more fully explore what system(s) of governance could provide the services that many think only a government based on force can provide.
And if we fail to find a more sustainable solution than the current structure of representative democracy, then we will be doomed to repeat the ebb and flow of waste, inefficiency and graft that have metastasized and made a mockery of our current system of governance — and the more poorer.
Note: The views expressed are solely the opinion of the author.
Conceptual and title source: How Government Regulation Makes Us Poorer | Mises Wire
Media source: https://mises.org/blog/how-government-regulation-makes-us-poorer