There is a case to be made for officially “budgeting” and capping costs of the thousands of rules and regulations that federal agencies set loose throughout the economy and society every year.
That case must open, however, with the recognition that — perhaps apart from certain readily quantifiable compliance and paperwork burdens — precisely tabulating the mostly indirect costs of the economic and social regulations to which businesses, localities and states are subjected is impossible.
We say this because, as James M. Buchanan — recipient of the Nobel Memorial Prize in Economic Sciences in 1986 — counseled, there are no “objectively identifiable magnitudes” available to the third‑party observer; in our case, the many regulators issuing rules. “Cost cannot be measured by someone other than the decision-maker because there is no way that subjective experience can be directly observed,” Buchanan stated.
Still, let’s acknowledge the importance of assessing and controlling, somehow, the heft of top-down regulatory interventions, while understanding that the party experiencing some potentially unfair burden is the only one that can actually speak to the true cost.
Besides, the aggressive top-down federal pursuit of “net benefits” that governs the Adminstrative State of today does smack of a distasteful utilitarianism that uses some as means for others’ ends. It’s due for some discipline.
Reckoning is rising in urgency because, if the spending side of the federal ledger that we already do measure every year is out of whack, it’s safe to assume the regulatory side we do not measure is busted, too.
Read the full article on Forbes.