In a mixed economy, regulations always grow

In my last post, I shared an observation that government regulation always seems to grow in scope and, once established, almost never shrinks. How does that pattern become established? There are many factors that lead to the entrenchment of regulatory power and it’s ever-growing reach.  Over the next few posts, I’ll discuss some of these underlying causes.

Ayn Rand viewed the pattern of increasing regulation as inevitable in the kind of political system that we have, which she described as a “mixed economy.” Because we have a combination of freedoms in the form of individual rights and controls in the form of ad-hoc, piecemeal regulations curtailing those rights, Rand viewed our system as inherently unstable. In her words:

“A mixed economy has no principles to define its policies, its goals, its laws—no principles to limit the power of its government. The only principle of a mixed economy—which, necessarily has to go unnamed and unacknowledged—is that no one’s interests are safe, everyone’s interests are on the public auction block, and anything goes for anyone who can get away with it. Such a system—or, more precisely, anti-system—breaks up a country into an ever-growing  number of enemy camps, into economic groups fighting one another for self preservation in an indeterminate mixture of defense and offense, as the nature of such a jungle demands. While politically a mixed economy preserves the semblance of law and order, economically it is the equivalent of the chaos that had ruled China for centuries: a chaos or robber gangs looting –and draining the productive elements of the country.”

When a question arises about whether stem cell research of the kind that Regenerative Sciences is doing should be regulated, think about all of the lobbying groups with their varying agendas and motivations that claim to have a stake in what the outcome is. Doctors, private corporations, researchers, patients, relatives of patients, insurance companies, pharmaceutical companies, religious opponents of scientific research, universities, political parties, and so on. Each group will immediately feel the urgent need to clamor for regulations and actions that will protect what they claim are the interests of some deserving group. Each group claims to have its own need for protection or concessions–which entail new restrictions or controls on others. No wonder lobbying is a multi-billion dollar industry! No wonder massive institutions like the FDA have expanded, in the face of these alleged high-priority claims! The upshot is a continual erosion of freedom in favor of regulation.

In all of this clamoring, legitimate questions get lost. Questions such as whether there is really a safety threat presented by these particular stem cell technologies (unclear), whether existing laws around fraud and product liability are already sufficient to protect patients’ rights (they are), whether there might be private groups or companies that can offer an independent evaluation of stem cell technology providers (try Googling it).

Instead, in a mixed economy, the pattern is that every problem looks like a nail and the hammer is always to increase regulation.

But surely there’s a limit to all the claims that might be raised and therefore some limit to the growth of regulation? Stay tuned for my next installment.

Read more at The Ayn Rand Center