A Call for Deregulation to Restore American Prosperity

Elon Musk has recently brought the concept of deregulation back into the spotlight, arguing that it is essential for restoring America's prosperity. There is a growing consensus that the number of regulations, laws, and rules in the United States has become excessive and complex. This regulatory thicket has grown over the decades, becoming convoluted, expensive, and riddled with internal contradictions.

Over Ruled: A Critique of Regulation

Justice Neil Gorsuch's new book, "Over Ruled," provides an insightful critique of the extent to which government regulations hinder the freedom that should be guaranteed in the United States. He argues that the sheer volume and complexity of laws are such that even seasoned lawyers, lawmakers, and judges struggle to make sense of them. Gorsuch points out that less than a hundred years ago, all of the federal government’s statutes fit into a single volume. By 2018, the U.S. Code had expanded to 54 volumes and approximately 60,000 pages. Over the last decade, Congress has adopted an average of 344 new pieces of legislation each session. That amounts to about 2 to 3 million words of new federal law each year.

The Impact of Regulations on Everyday Life

The effects of these regulations are palpable in everyday life. Household items such as showerheads, toilets, and garbage disposals are federally regulated, often resulting in designs that make the products less effective. The impact of regulations extends beyond household items. Every business, every product, and even the fabric of the aprons in restaurants are subject to some form of regulation. Real estate developers argue that the housing shortage is a result of extreme controls on every single step in the hiring and building process. This leads to higher prices and less choice for consumers.

The Burden of Compliance

The burden of compliance with regulations is a significant deterrent for businesses. Entrepreneurs often find that a large portion of their focus is not on serving the customer but on compliance and administrative red tape. Hiring a single employee can trigger a cascade of bureaucratic demands, each with its associated costs. As the number of employees grows, so do the mandates and the legal risks.

The Need for a Bonfire of Regulatory Codes

The term "deregulation" does not fully capture the extent of what is needed. The United States needs a significant reduction in regulatory codes. This task falls to the legislatures, not the judiciary. In the late 1970s, there was a bipartisan consensus to deregulate three industries: trucking, energy, and telecommunications. These initiatives were successful and contributed to the prosperity of the 1980s. However, the financial deregulation of 1983, which freed up the banking sector, has been blamed for subsequent crises, casting a shadow over the concept of deregulation.

Market-Based Regulation

Deregulation does not mean a lack of regulation. In the absence of government intervention, market-based regulation can still exist. Professional fields often have oversight organizations that certify credentials. User ratings and reviews also play a significant role in assuring quality in the modern marketplace.

Eliminating Agency Capture

The issue of agency capture, where large private companies manipulate the regulatory system to their advantage, is a significant concern. The most effective solution to this problem is to eliminate the agencies and the laws and legislation that sustain them.

Bottom Line

There is a growing call for another round of genuine deregulation. The cost and complexity of agency compliance are too high and pose a significant threat to free enterprise. Ideally, the government should only do what is mentioned in the Constitution and nothing more. This would entail a dramatic reduction in the regulatory state. This is a complex and controversial issue. What are your thoughts on this matter? Do you agree with the call for deregulation? Share this article with your friends and join the conversation. Don't forget to sign up for the Daily Briefing, delivered every day at 6pm.