|Montreal, September 28, 2002 / No 110|
by Harry Valentine
The economist John Kenneth Galbraith is one of the often quoted proponents of the claim that the need for government regulation increases as society becomes more complex. The complexity being referred to is related to technological advances and scientific discoveries that are continually occurring. Many of these breakthroughs have an influence or an impact in one or more sectors of the economy.
In recent years, the obvious advances have been in the telecommunications
and information processing areas. Computing power has been steadily increasing
along with the capacity to transmit increasing volumes of information to
more destinations and in less time. Other less obvious advances have occurred
in fields such as energy generation, energy utilization and in areas pertaining
to genetics and medical sciences.
Some scientific advances, such as those in reproductive technology, are believed to pose moral and ethical questions. Breakthroughs in this area have made it possible for post-menopausal women to "conceive" and have babies, as well as assist future parents in choosing the gender of their offspring. Other breakthroughs may eventually allow for the cloning and genetic modification of people, plants and animals. In the genetic field, it is becoming possible to use pigs to grow replacement heart valves for humans, or use a mouse as the basis to generate a new human ear. People like Prof. Galbraith contend that it is the role of government to formulate regulations in all these new areas of scientific and technological advancement.
There is no shortage of politically connected people, including academics, making the same call. They believe that forcible government coercion against the peaceful activities of private citizens is somehow needed in the form of new regulations, to be administered by bureaucrats or government tribunals for the purpose of saving society from some unforseen future nightmare.
Most politicians are often willing to listen to such calls to expand the size and role of government in this regard. Very few politicians, no bureaucrats and no politically connected cronies would give any consideration to the possibility that regulation may be unworkable, that it may fail or accomplish something other than or even the opposite of what was originally intended.
Productive reclassified as criminals
The increasing number of restraints and regulations placed on peaceful and productive activities of citizens serve only to slowly erode their basic rights and freedoms. They make it easier for otherwise peaceful and productive private citizens to be more easily reclassified as criminals by overzealous government officials trying to score points with their superiors or with the government's political allies.
None of the existing or proposed regulations prohibit the initiation of forcible coercion or fraud by one citizen against another. Instead, the increasing number of regulations and restraints on basic freedoms does little more than create more complexity in the lives of peaceful private citizens, even more so than would otherwise be caused by any or all of the new technologies or scientific breakthroughs combined.
Several economists including three Nobel Laureates (Hayek, 1974; Stigler, 1982 and Coase, 1991) have shown through extensive academic research, that most if not all of state enforced regulation will ultimately fail to achieve its intended aim. Nevertheless, the calls to increase the scope and magnitude of government regulation continue unabated, as if Galbraith were infallible and omniscient.
The people who will ultimately benefit from increased state regulation are government employees such as bureaucrats and their support staff, as well as politically connected allies who would be likely to receive an appointment to a regulatory tribunal. All would be well renumerated while consuming wealth and interfering in the creation of new wealth. Despite evidence to the contrary, the belief remains that government can somehow benefit society by regulating the peaceful and productive use of new and changing, evolving technologies.
One Canadian regulatory body that has had to face the challenge of administering regulation in an environment of rapid technological change is the CRTC (Canadian Radio-television and Telecommunications Commission). Rapid technological change now enables up to 15,000,000 simultaneous signals to be transmitted along one single strand of optical fibre, up from 35 signals 20 years ago. The speed of computer modems has increased from 9.6K to high-speed Internet connections. Radio and television programs originating from almost anywhere in the world are available on the Internet.
Yet there is still much scope to improve the technology and such advances are likely to appear on the market within the next two to three years. Advancing technology has made the CRTC obsolete, incapable of fulfilling its original mandate "to ensure balanced programming that reflects Canadian multiculturalism." The CRTC may not be the only regulatory body that has been obsolete, even from its inception. All economic regulatory agencies and tribunals are equally as obsolete, since they contribute nothing of value to the society as a whole. They exist solely to protect the interests of a small handful of political allies.
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