In this brief passage from his new book, What It Means to Be a Libertarian, Charles Murray proposes replacing all federal regulation of products and services: "Remaining regulations: none. Instead: Providers of services are liable for harms caused when the provider's practice is not in accordance with ordinary professional standards." On workplace safety, Murray says about the same thing: Eliminate all regulations and hold employers liable if they are at fault when someone gets hurt. Thus he would scrap America's regulatory regime and save the billions of dollars that go into enforcing it.
Has Murray gone over the top with these far-fetched ideas? How can we survive without regulating possibly dangerous products and workplaces? Murray argues his point skillfully but mostly in the abstract. To understand better how regulation works in practice, with real companies battling real regulators, read the recent report by the U.S. General Accounting Office (GAO), laconically entitled Regulatory Burden: Measurement Challenges and Concerns Raised by Selected Companies.
GAO's idea was to venture into the real world and ask companies, "OK, what's really bugging you about federal regulations?" Understandably, most of the companies they approached declined to participate. After being drawn and quartered by the FDA, EPA, IRS, or some other federal inquisitor, who would want to relive the ordeal for another agency's voyeuristic pleasure? And what regulated firm wants to be labeled a troublemaker by its Washington overseers? But a few firms did agree to cooperate, and the compilation of their laments is a stunning journey into the sinister world of regulation.
The report's appendix consists of page after page of plaintive wails from the companies, detailing their huge costs of compliance, their puzzlement at what they are supposed to do, and their belief that obeying the regulations has little noticeable benefit. Each specific complaint is followed by a condescending, self-serving dismissal from the pertinent regulatory agency. In more than 150 cases, not once does our supremely confident government admit that it was wrong. At their most contrite, agencies claim to be getting better and more efficient. Invariably they can cite laws and court cases that supposedly justify everything they've done.
My own favorite horror story involves a fish farm and its tormentor, the Food and Drug Administration (FDA). When shipping a tank of live fish, the transporter would toss in some ice (to help the fish survive hot truck rides) and some salt (to kill parasites).
"No way!" says the FDA. Neither ice nor salt has been approved as a drug for fish, and none of the nation's small-scale fish farms has been willing to spend the millions of dollars on lab experiments required to get FDA approval. By using either, the company would not only invite the FDA's lash but also violate the loan agreements and the state regulations prohibiting the use of any but "approved drugs."
So what we need is a team of technicians making hapless laboratory rats swallow huge quantities of ice, day after day, to see whether they develop a chronic disease. Maybe they'll find that ice is a rat carcinogen if eaten in massive quantities, in which case ice could be banned for human consumption. Salty pretzels and iced tea could be the new dioxin; Minnesota, the new Love Canal.
The FDA's response is typically miasmic, essentially saying that (1) it has never prosecuted anyone over iced fish tanks, but (2) it could if they wanted to, and (3) it's a good thing it has the power to do so.
Even when regulators seem to have a point, it's probable that only GAO, the feared federal watchdog, has had the clout to pry that information out of the agency. Too often the companies operate in the dark, dutifully laboring over useless forms they think are mandatory. A machine maker spent nine weeks cataloging every chemical in every can of paint he used in a year, only to be told that this was not required after all. One small business timidly opines that pension plan regulations have become "increasingly complex," but the long, convoluted multiagency response makes it clear that the regulations are in fact a living hell.
Agency comments are classic Beltway-speak. One company complains that its discharged water is required to be cleaner than rainwater. Yes, the EPA archly responds, "there can be situations in some parts of the country where discharge effluents might be required to be cleaner than certain episodes of precipitation." Another company is sternly rebuked for its inability to distinguish antidegradation provisions from antibacksliding rules. Everyday words like empty (as in chemical tanks) and exposure (to a substance) become subjects for protracted disputes, and corrosive is sickeningly defined in terms of effects on captive rabbits.
Yes, some companies sound like real whiners. Yes, some commit harmful offenses, such as dumping zinc into the Cuyahoga River. But the overall impression one gets from GAO's grim tome is of despair, of exhaustion from the Kafkaesque situations in which firms are hopelessly ensnared. The people held accountable seem haunted by fear of breaking the ever-changing and obscure rules, thereby incurring gigantic fines or even prison terms.
Mr. Murray, please tell me more about libertarianism.
Kenneth M. Brown is a visiting scholar at AEI. His book Downsizing Science: Consequences of Declining Federal Support for Science and Technology will be published by the AEI Press late this year.