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Government Regulations and Individual Freedoms

By: José Azel - Jul 8, 2013, 4:05 pm
Spanish Translation

Montreal city councilor Benoit LaDouce has proposed a new law requiring all dogs in that Canadian city to understand commands in both English and French.  The councilor explained to CBC Radio that the law is necessary to counter the “untenable chaos” at public parks that results when dogs understand commands in only one language. LaDouce’s proposal requires all dogs in the city to learn at least 80 commands in both languages as attested by a city employee who would administer a test to certify the dogs’ bilingual comprehension. South Florida cities are considering similar legislation requiring all dogs to be bilingual in Spanish and English commands.

Seriously, the original Montreal story was intended as satirical, and I made up the South Florida connection (I think), but the story serves to illustrate the exponential growth of paternalistic regulations at all levels of government.

Clearly, effective and appropriate regulations are necessary in a market system and inherent to the rule of law. Unfortunately, most of the regulations promulgated by legislative and administrative bodies do not meet the appropriate and necessary criteria.  It is not that lawmakers are evildoers, as most new regulations are advanced with the sincere belief that they are in the public interest. Lawmakers seek to enact regulations to improve safety in consumer products, to assure the efficacy of pharmaceutical drugs, and countless other reasonable goals.  It is hard to argue against such noble objectives, but the attempt to realize them via regulations is often, ill advised, counterproductive and a parlous journey that threatens our personal freedom with myriad restrictions.

Underlying the motivation for many paternalistic regulations are the twin mythical convictions that most individuals make bad decisions when allowed to think for themselves, and that businessmen, acting out of greed, endanger the gullible public by cutting corners to make an extra buck. Regrettably, political rhetoric caricaturizes regulatory policy, ignoring its serious ethical concerns; Democrats warn of the wholesale evils of deregulation and Republicans emphasize the job-killing effects of regulations. There is more to regulations.

Regulatory policy substitutes and imposes the judgment of a small group of regulatory wise men over a process of voluntary exchange that reflects the needs and preferences of the population at large. In a free market economy, every voluntary exchange guides resources to their highest value use. Thus every regulation that impedes voluntary exchanges reduces the effectiveness of resource use.  Regulatory policy should be viewed with extraordinary suspicion and used frugally.

Paternalism embodies the view that other people cannot be trusted to make good decisions impelling government regulators to step in. Curiously, we rarely demand that government make decisions about our lives. It is only other people that cannot make good decisions. Social psychologists label this cognitive bias as a “fundamental attribution error,” where we emphasize the internal characteristics of a person in explaining their behavior while under-valuing external situational factors.  Oddly, we take the opposite view when evaluating our own behavior.  For example, according to my wife, if I have an automobile accident it is because I am a bad driver (dispositional); if she has as an accident it is because it was raining and visibility was poor (situational).

Unquestionably, commerce is a self-interested pursuit that encourages and rewards selfish behavior. It does not follow, however, that business is about harming, or exploiting customers. In a free enterprise system, profits result from creating superior value, not from exploitation. Demonizing the profit motive implies the absurdity that business losses are admirable.  Government regulators, perpetrating an attribution error, assume the worst of the internal characteristics of market participants and initiate the coercive force of regulations to restrict the voluntary decisions of individuals and businesses.

Regulations shifts responsibility from individuals and businesses- where responsibility belongs- to the government. Absent a coercive regulatory environment, businesses would compete for customers by developing, and fiercely protecting, an impeccable reputation for product quality. Unlike regulations, markets do not cause escalating bureaucracies and inefficiencies. Competitive markets lead to innovation, customer satisfaction and declining prices.   After all, one does not succeed in business by harming or mistreating customers.

This is not to suggest that regulations are always unnecessary. Policies that seek to protect children and those unable to make reasoned judgments are clearly defensible, but regulations that aspire to protect individuals from themselves undermine the very concepts of personal responsibility and civil society.

Accepting responsibility for our own lives is an imperative moral and intellectual achievement. It is a celebration of our individual freedoms.

This article first appeared in the Miami Herald.

José Azel José Azel

Senior scholar at the Institute for Cuban and Cuban-American Studies at the University of Miami. Azel was a political exile from Cuba at the age of 13 in 1961 and is the author of Mañana in Cuba. Follow @JoseAzel.