Now and again I run into people who feel convinced that government regulation is a Bad Thing. They seem to believe quite firmly that freedom, and by extension a free market economy, is the most desirable state of affairs. Knowing that such people are usually quite impervious to the blandishments of reason, I nevertheless feel compelled to offer some perspective on this quite wrong-headed idea.
To begin with, I think we can all agree that personal freedom is a wonderful thing, and should be given the greatest latitude that is practical. But I think we can also agree that personal freedom can be abused. I’m sure you can think of examples of how people sometimes injure others and see no problem with having done so; there’s no need for us to dwell on this point.
At the moment, I’m more concerned with the conflict between free market ideology and the practice of government regulation. I’m going to explain to you why strict government regulation is a good thing.
This is not to say that the regulations we actually have in the United States today are necessarily a good thing. We can all think of examples of regulation that are overly burdensome, ineffective, open to corruption, a reflection of the enormous egos of powerful people, and so forth. Trotting out your favorite examples of this would serve no purpose. I’m strictly concerned to defend the principle — the idea that regulating economic activity is a good and necessary activity of government. Once we accept this, we can go on to look at how to improve the thorny process of establishing the appropriate regulations.
Human behavior is mostly, or perhaps always, impelled by instinct, and the roots of instinct run deep. Free-market conservatives seem often to think that people are motivated, at least in their economic actions, by something called rational self-interest. But this idea is deeply flawed, in two ways. To begin with, evaluating the likely consequences of our actions is often quite difficult. When people try to make rational decisions about what action to take, they will often fail to take into account things that they ought to be considering. They may reach a bad decision, one that leads to a poor or catastrophic outcome. But that can happen even if their motivation is good — and often, it isn’t. Our self-interest is typically defined not by reason but by emotion. And our emotional drives are often unconscious.
Put these two factors together, and what you have is people making bad decisions for bad reasons. Expecting that the results will invariably turn out to be good, which is what free-market ideology tells us, can only be called shockingly naive.
Our instincts were honed over the course of millions of years in which our species lived in small bands, or tribes, in sub-Saharan Africa. There have not been nearly enough generations since the invention of agriculture (circa 10,000 years ago) for human instinct to revise itself so as to operate smoothly in the more complex, and much more rapidly changing, economic environment in which we live today.
Instinctively, we gravitate toward actions that provide short-term benefits for ourselves, our families, and our friends. Our instincts do NOT operate well when evaluating possible long-term consequences, nor the large-scale consequences that may accrue to strangers. These facts have been abundantly demonstrated by psychology; there’s really no need to debate them.
Why do our instincts operate this way? Because in the environment in which our ancestors lived, there were no long-term, large-scale consequences to any behavior — with one exception: Passing one’s genes to the next generation had long-term consequences. As a result, our instinct for procreation is extremely well-developed.
Technology changes all that, as does a modern economy. Today, a man can pick up a pen and sign a document. That’s his direct action. It’s nearly effortless, and it will provide, let us say, considerable near-term economic benefits to himself, his family, and his business partners. The result of his action may be, for instance, the destruction of a habitat that thousands or millions of other people rely on for their food. The results may include starvation, disease, and even war. But the man who is signing the document fails to consider that — or considers it briefly and dismisses it with a shrug. His instincts ride rough-shod over such considerations. His instincts simply do not allow him to sacrifice his own short-term gain in order to sustain the long-term well-being of strangers.
That, in a nutshell, is why government regulation is necessary. A rationally functioning government (if we had one) would be able to take the long-term, large-scale view into account without being swayed by personal considerations. The results would, in the long term, in the large scale, be better for everybody. Yes, in the short term there would be losses to some individuals. A rational government would insure that such losses were not too severe. (Injuries to pride don’t count.)
The conservative apologist will, of course, not fail to trot out the existence of charities, in a feeble attempt to undercut the point I’m making. So let’s admit that, yes, there are such things as charities. Some of the people, some of the time, are indeed motivated by a real concern for the lives of strangers. But are charities notably effective in preserving the biological vitality of the oceans or the rain forest? No, they are not. Charities are a wonderful thing, but they’re completely incapable of stemming the tide of free market destruction of the environment.
Even if the environment were not at issue, the free market would still allow the rich to exploit the poor, causing enormous suffering. Again, it’s vital that government step in, stop rich people in their tracks, and say, “No, you’re not allowed to do that. You’re hurting these people. You need to behave differently.”
Anyone who doesn’t understand this is either invincibly stupid or a moral monster. It’s really very simple.
Again, I’m not saying that the government we have is actually very good at regulating anything. We clearly need a lot more stringent regulations than we have now, in many areas. We need better land use. We need better energy policies. We need stringent population control. We need much more stringent testing of new chemicals used in manufacturing before they’re allowed to be used. What we have, in the United States today, is pretty much a farrago of corruption and incompetence. But if you think doing away with regulations will somehow magically improve people’s lives over the long haul, you don’t understand human nature, nor do you understand the finite nature of the world we live in.