A regulatory scheme that actually helps growth, employment, and equity
Task forces come and go, but city and county regulations still stymie new business and expansion of existing businesses, to everyone's detriment. Howard Baetjer, Jr. in Reason magazine explores a radical way to provide effective regulations, but without all the downsides (hint: use markets).
To regulate is to make regular and orderly, to hold to a standard, to control according to a rule, as the thermostat regulates the termperature in a building.
Market forces do this constantly. Competing businesses offer what they hope will be a good value, then customers choose among various offerings, then the competing businesses react to customers' and competitors' choices. The process is the market's regulation.
How effective are these market institutions at giving us the kind of regulation we want? More, I'll argue, than government institutions are. Indeed, since government regulation is top-down, with the public exerting control only indirectly through the political process, government regulations is itself *nearly unregulated.* This is a flaw that makes it unresponsive to public's wants and needs. Regulation by market forces, by contrast, is bottom-up, with the public exerting control directly in the market. It is not perfect--nothing human is perfect--but it works pretty well, and it is very responsive to the public's wants and needs.
With government regulation, the quality-assuring agency is a monopoly; with market regulation, quality-assuring enterprises must compete. With government, the quality-assuring agency is all but unregulated; with markets, the quality-assuring enterprises are regulated by market forces. With government, the public votes in elections every few years; with markets, the pubic "votes" with dollars every day. With government, the public selects among candidates holding positions on many issues; with markets, the public makes a choice about the particular good or service in question.
This article originally appeared in Reason. Read the whole thing here.
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