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Regulation

Regulation
January 23, 2017
California Overregulation Drives Uber Testing to Arizona
After California government regulators stopped Uber, a popular transportation network company connecting drivers and riders, from conducting real-world tests of autonomous navigation technology, the company moved its test grounds to Arizona.
Regulation
January 20, 2017
Fixing FDA is Literally a Matter of Life and Death
In a December 60 Minutes interview, House Speaker Paul Ryan spoke of the need for regulatory reform.
Regulation
January 20, 2017
Dodd-Frank: All Of It Is Awful – So All Of It Needs To Go
For decades and decades in Washington, D.C., members of both political Parties have time and again thrown at us the Groucho Marx quote: “Who are you going to believe, me or your lying eyes?”
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Economy
January 18, 2017
Government’s War on Bitcoin Bank Illustrates Need for Currency Innovation
The federal government’s war against a popular digital asset exchange company offers a lesson in why consumers and business owners should have more freedom to pay as they wish.
Regulation
January 17, 2017
Undoing Obama: Who Should Do Which Government Rollbacks?
Donald Trump will on Friday be sworn in to succeed President Barack Obama. Trump is the incoming – in large part because he repeatedly promised to undo much of what has been done by the outgoing.
Law
January 13, 2017
PRESS RELEASE: Heartland Institute Experts React to U.S. House Passing the REINS Act
"The REINS Act helps restore the proper balance of power by requiring Congress to approve all new major regulations, thereby increasing accountability and transparency in the federal regulatory process." - David Applegate
 

The Issue

How governments regulate businesses in their jurisdictions has a major effect on economic growth and individual liberty. Along with taxes and government spending, regulation is one of the three principal levers policymakers can move to shape the business climate of their nation, state, or city.

Most policymakers are relatively uninformed about why governments regulate in the first place. Regulations are only rarely justified by the “public interest.” Experience suggests they are often proposed and lobbied for by interest groups who stand to benefit from less competition or higher prices. Over time, regulators are captured by the industries they are supposed to over-see, with the result that the cost of regulations falls disproportionately on consumers.

Regulation aimed at preventing monopolies or altering their behavior is called antitrust. But natural monopolies are actually extremely rare, while many competitive industries are regulated. Distinguished economists have pointed out that neither the number of firms in a particular market nor their pricing behavior is reliable evidence of market power, so regulators have no way to identify monopolies even if they wanted to regulate them. In fact, regulation is probably the leading cause of monopolies by erecting barriers to entry.

Economist James L. Johnston observe that industries are most often regulated when three conditions are present: the product or service is subject to substantial shifts in supply and demand, supply reliability cannot be achieved through precautionary stocks or other market techniques, and substantial social costs are incurred when supplies are interrupted. The intended effect of regulation in such cases is to improve the stability of supply by encouraging extra investment in reliability.

Regulations impose enormous costs on consumers: approximately $1.5 trillion per year in the U.S. alone. Annual rankings of countries by their “economic freedom” also find close correlations between economic growth and indices of freedom, with regulations being an important part of the indices.

Consumer protection is often cited as the reason regulations are necessary, and few would argue against having some safety standards. But calls for such regulations are increasingly out-of-step with sound science and economics. In his book Give Me a Break, John Stossel critiques false alarms he reported over the years concerning (in alphabetical order): airbags, ambulance service, asbestos, Aspen lead poisoning, breast implants, cigarette lighters, crack babies, dioxin, domestic violence, Erin Brockovich, ergonomics, forest fires, global warming, Love Canal, McDonald’s coffee, milk price-fixing, organic food, private toilets, rent control, second-hand smoke, Times Beach, and vaccines.

Our Stance

Regulatory reform is a promising area for bipartisan cooperation. At the national level, deregulation of trucking, airlines, and other major industries started as a Democratic initiative and was carried on by Republican administrations. Paul London, who served in the Clinton administration from 1993 to 1997, says bipartisan support for free trade, judicious use of antitrust laws, and the repeal of price and entry regulation in key sectors of the economy “made the prosperity of the 1990s possible.” More recent examples of deregulation, though, are more difficult to find.

Featured Subtopics

Antitrust law book
Regulation aimed at preventing monopolies or altering their behavior is called antitrust. But natural monopolies are actually extremely rare, while many competitive industries are regulated.
Man with head down on stack of regulatory binders
How governments regulate businesses in their jurisdictions has a major effect on economic growth and individual liberty. Along with taxes and government spending, regulation is one of the three principal levers policymakers can move to shape the business climate of their nation, state, or city.
Woman cutting red tape from man
Regulatory reform is a promising area for bipartisan cooperation. At the national level, deregulation of trucking, airlines, and other major industries started as a Democratic initiative and was carried on by Republican administrations.

Additional Subtopics

  • Product Safety

Videos

Title: Know Your Second Amendment Rights
Description: Have you lost enough control to government forces? Know your Second Amendment rights and learn to recognize who is trying to take away your weapons … and why. The Second Amendment states, "A well-regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed." So why is your government interfering with your constitutionally protected right to own guns?

Regulation Experts Team

The Heartland Institute's experts on regulatory issues are available for legislative testimony, speaking engagements, and media interviews.

Staff & Fellows Policy Experts

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