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Cataloging Washington's Hidden Costs, Part 5: When Regulation Tramples Health and Safety

Act surprised...Show concern...Deny...Deny...Deny.

What if anybody in power ever actually paid attention to the body count of federal regulation?

We just finished another year of over 3,000 regulations and 80,000 Federal Register pages and it's increasingly clear no one in authority does. Scholars have noted how safety regulations can overwhelm and confuse, and amount to less health and safety. Other times, regulations can be deadly, affecting the public's right to choose and costing more lives than they allegedly save: Compulsory corn-into-fuel ethanol policies aggravate global hunger; Corporate Average Fuel Economy standards that downsize cars cost lives. Homeland security regulations that put more people on the highways relative to the airways cost lives too.

The human cost of such regulation remains an unmeasured cost. It needs to be dealt with by Congress, because it's full steam ahead as far as federal agencies are concerned. Beyond regulations actively causing harm like this, sometimes the very philosophy of central regulation is flawed.

To actually secure real and growing benefits, it isn't established that central regulation is the best means to do it. It's just assumed to be obvious. Few growing up in government schools would think to question this assumption. As I often argue, the benefits allegedly sought by so-called regulation are best seen as forms of wealth. What do we know expands wealth? Markets do.

But when “regulation” removes values like risk reduction, or privacy, or cybersecurity or safety from competitive pressures, agencies undermine the actual regulation that needs to take place. When agencies substitute their one-size-fits-few policies, they impose costs and cause harm to values that should constantly increase and improve. Regulation instead tends to set a floor. Most tainted meat was approved by the U.S. Department of Agriculture.

The same "wealth" status also applies to information, and information mandates such as those affecting disparate concerns like privacy standards and food labeling can backfire. The mechanisms by which risks are identified, managed, reduced, communicated -- and society made safer and healthier -- have not all been discovered, and they certainly haven't been discovered in Washington, D.C. Yet the federal government behaves as if answers all lie within its faculties, as if it is necessarily and always the best source of regulation.

The problems with this central command and control mindset continue. Regulatory "cost-benefit analyses," which rarely actually exist by the way, rarely incorporate any "life-years" or negative wealth effects from regulations’ diminishing of societal wealth generally. Nor do regulators care about individual human beings’ job losses. Job losses may lead to people obtaining lower quality or no health care, for example.

It is past time to acknowledge that health, safety and environmental regulations have trade-offs that can adversely impact health and safety. Government regulation is more a source of disruption than one of constantly increasing health and safety wealth. Unelected agency bureaucrats make "law" rather than our elected representatives. And they do it in a ham-handed dictatorial and unsupervised fashion that undermines true regulation and rarely answer for any mistakes.

Civilization requires that private risk-management institutions like insurance and liability emerge alongside new and complex products and services whether nuclear energy, homeland security, nanotechnology, biotechnology, financial instruments, cybersecurity or you-name-it. If government interrupts these processes, the right risk mitigation approaches may never get created. Health, safety and economic benefits cannot escalate as they otherwise would. The ways risks are identified and society made safer and healthier have not all been discovered by a priestly elite, and in the nature of things responses must not be set in stone by it.

Regulation needs a rethinking. It is irresponsible for government to induce people into becoming overly helpless or dependent while at the same time pursuing a philosophy of regulation that, on the one hand, sometimes positively injures the public, and on the other undermines real regulation. The federal government claims its interventions are a benefit. Policymakers must recognize when interventions are often a cost.

Next Time: The Job Costs Of Regulation