Saturday, July 09, 2011

The "Good Side" of Regulations

We have created a system, a bureaucracy, that is self-perpetuating. People whose job is to come up with more and ever more invasive regulations, restrictions, directives and mandates.  I've complained about these rules before. Crafted "in the name of the people" for our own good, and enforced with the full, threatening power of the government.

Some would argue that some regulations are necessary. Well, some may be tolerable, but what if we reached that point a long time ago? What if we have passed the point of acceptable, useful, needed regulations and into the point of pedantic bureaucratic market meddling? Worse, the organism we've created encourages ever more regulations. New bureaucrats with something to prove, departments that must show they're doing something to earn that ever larger budget they're requesting. How will we ever know if we've gone beyond that necessary point? 

But the part that is often overlooked is that whether you agree with the regulation or not, they have a cost. By requiring that businesses improve their product in some way, or that they pay their employees more, or that they use more expensive equipment, or that they use more environmentally friendly processes, you are increasing the cost of producing that product. And since that company isn't going to sell their product for a loss (at least not for very long), then that company is going to increase the price of the product in order to cover the increased cost of producing it. 

So in the end, it is you and I, that pay the increased cost of these regulations! 

Again, you can argue about whether each new regulation is worth the associated cost, but, as this link shows, it seems to me that we have already passed the point of diminishing returns a long time ago.  

No comments :

Post a Comment