Lately I’ve seen these arguments on several blogs and have even been discussing them with a relative who shares these views: “We have to have some government regulations or everyone will get ripped off” and, “What would replace the FDA, USDA, FTC etc?”
A lot of confusion revolves around the failure to properly understand the concepts ‘initiatory force’ (regulations) and ‘retaliatory force’ (laws). According to the principle that all men have an inalienable right to life, liberty and the pursuit of happiness, the laws of this land are supposed to be designed to protect those individual rights. And since rights can only be violated by the use of force whether direct or indirect (as in fraud), our laws thus need to be based on the principle that the government must have a monopoly on the retaliatory use of force and can legally employ that force only against those who initiate its use. Our Constitution says in part: “To secure these rights governments are instituted amongst men.”
But so new was the concept of rights that even many thinkers in our founder’s time did not grasp its implications regarding the use of force. As soon as the ink dried on the Constitution, state governments began writing laws that employed the initiatory use of force against citizens. Whereas proper laws are based on the principle of protecting people’s rights with the retaliatory use of force, regulations are based on the principle of employing initiatory force to compel a desired behavior in the absence of a threat to anyone’s rights. Laws ask how do we best exercise our rights in the context of retaliatory force? Regulations ask how do we best violate rights with initiatory force? This last is never admitted by the regulators and their legislative creators but it is true nonetheless.
This confusion between starting the use of force and retaliating with it has long since led academia to believe that one can mix politics and economics and still have a just and prosperous society. It can’t be done any more than one can fix a flat tire on one’s car by changing a light bulb in one’s house. The car and house are two different creatures each with its own nature and purpose. One wouldn’t change the car’s oil in the living room or take a shower in the garage. If the nature of each is respected then both the car and house can efficiently coexist in the same life context of any individual.
And so it is with politics and economics. Economics is the science that studies the nature of voluntary interactions between people in a given society. Politics is the science that studies the nature of physical force in that same society, the application of which is called law. To interject force in an economy is to nullify free choice. Societies may stumble along with such a mixture for awhile but will reach a tipping point where they will have to repudiate their controlled economy or face collapse. And what they have to repudiate is the initiatory use of force, not its retaliatory use.
A free country will not have any government regulations. The alphabet soup bureaucracies like FDA, USDA, CDC etc would not exist except as private testing and inspection companies.
This does not mean that there won’t be any regulations. Banks, insurance companies and others conduct client inspections now. That will multiply in a laissez-faire economy. There won’t be any unself-interested bureaucracy to rely on. The more people have to rely on their own judgement the better at it they will get. The best regulator of the market is the dynamism of the market itself. That dynamism is the freedom of all the people to pursue their happiness according to their own best judgement. It’s called capitalism. It means freedom by right instead of by permission. Regulations = permission.