Alberto Mingardi  

Fred Smith reviews Charles Murray

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Fred Smith, the founder and former President of the Competitive Enterprise Institute, has an interesting review of Charles Murray's "By the People: Rebuilding Liberty without Permission" at CapX. It is a thoughtful and interesting article (also recommended is this review by Lenore Ealy, published by the Library of Law and Liberty).

In his book, Murray first examines the rise of the administrative state: a process which is recent and has occurred rather fast, but which seems to be irreversible. The dream of the Founders, Murray writes, is gone. He doesn't quite say it this way, but he is basically acknowledging that Constitutional limited government has failed. Constitutions - in the US as well as elsewhere - were a generous project to tame Leviathan, but eventually Leviathan got the better of them. Limited government doesn't stay limited, for a variety of reasons (read, among others, this wonderful short article by Anthony de Jasay).

Fred Smith agrees with Murray's synthetic and yet effective effort in making sense of ever-growing government. But he is less enthusiastic about Murray's practical proposal for achieving (a bit more of) freedom in our lifetime.

Murray suggests the development of a "Madison Fund" aiming at assisting pro-bono small entrepreneurs struggling with the administrative state. His dream: litigation on a grand scale, to combat bureaucratic stupidity. This could be accomplished, he suggests, either by a non-profit fund or by some sort of insurance scheme (I am not familiar with the relevant U.S. law, but unfortunately that cannot be done in other jurisdictions, for example, in Italy, where it is illegal to insure yourself against sanctions). As Fred writes, Murray "hopes that organized resistance to overregulation might push lawmakers and regulators to adopt less burdensome regulatory practices".

In Murray's narrative, the little guy feels hopeless in front of the ever-powerful government machine: but government is like the Wizard of Oz. Government is nothing but its numberless officials, who may decide to exercise their discretionary power depending on a number of variables.

What if many small entrepreneurs started to rebel, by not adhering to regulations that are outdated and basically useless? What if they got top notch legal defense? What if they started winning cases in court? What if the officials that exercise their powers in the most capricious and destructive ways were exposed to the media?

Were the Madison Fund or another similar device to succeed on a considerable scale, Murray reasons, we could expect bureaucrats to stop enforcing trivial regulations and focus on just the few good things they should indeed do.

He is effectively proposing civil disobedience but of a peculiar kind: he doesn't want people to stop paying taxes or resist to all kind of laws, but only some specific regulations. Which ones?

Smith points out that

Murray seems to believe that common sense provides adequate guidance for sorting out "good" from "bad" regulations and that Americans oppose many of the bad ones. Yet, recent debates over financial, health, and environmental regulations cast doubt on this. Many feel that America is over regulated, but support specific regulations--such as for example, the left's support for more restrictive environmental and financial regulations and the right's calls for tighter security and immigration restrictions.

As we all know, common sense tends to be quite uncommon. This is why, in the first place, bureaucrats are so obstinate in enforcing norms that appear just, well, stupid, to any moderately liberty-respecting person.
By the People.jpg

My favorite example of idiotic regulation is a rather harmless one. I don't know if any of our readers are familiar with the splendid city of Matera, a little jewel in the South of Italy (consider it for you next trip!). Matera is famous for its "sassi": traditional houses literally carved into the rock. Basically, they are caves. Which means: there is only one way in, one way out. And yet, in the newly restored restaurants in the City, you won't miss the green "Emergency Exit" sign pointing to the, well, only available exit. The signs stand out, on the beautiful, white tuff walls.

Why do restaurant and hotel owners, who are intelligent men, keep the sign on when it is so obviously useless? Because if they get inspected (it happens, even in the Italian South), they'll get fined.

Murray knows that in an ideal world government official will be thoughtful and considering, and thus they'll just let go, when it comes to norms that a cleverer legislator would have updated or canceled herself. But we cannot trust officials' self restraint, and therefore he proposes a device that considers more promising than others, in forcing restraint upon them.

I am not sure we will see such a development in the real world, but Murray is also doing something the libertarian movement really needs: that is, opening a wider strategic discussion on how to promote liberty not just as an idea, but also as a possibility for our life time. I hope more will join Fred Smith in debating his insights.


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COMMENTS (3 to date)
david writes:

Why are those signs useless? Commercial buildings are frequented by visitors, who may be unfamiliar with the layout of a multiple-room cave during an emergency.

ThomasH writes:

"Common Sense" is indeed not a good basis for opposing existing or proposing new regulations. Trying to figure out the costs and benefits of a regulation are not straightforward. Careful analysis would be needed.

Whether having identified a clearly cost ineffective regulation finding and indemnifying a citizen to contravene it is a good strategy is another issue.

Shayne Cook writes:

A little (true) story ...

A former student of mine had a small and viable business. She had been in business for quite some time (not a new business) and had an opportunity to move it to a more desirable location - same business, but slightly larger in a new place.

But she ran afoul of a new regulation, requiring "storage lockers" for each of her employees. Her business at its original location pre-dated the locker requirement, so it had "grandfathered" in, and had never had, or been required to have, lockers in her original location. Furthermore, she wasn't aware of the requirement.

Bottom line, less than two days after she opened her new shop for business, a city inspector stopped by and closed her shop. She would not be allowed to re-open until she had purchased and installed "to spec" lockers for each of her employees (7, including 3 part-time and not including her, the owner.) The lead time for these "to specification" lockers was six weeks.

The regulation is of course the regulation. And she, of course being the business owner has an obligation to know the regulation - and comply with it.

But the question isn't really about whether the "to specification employee locker" regulation is "good", "bad", "too much" or "too little".

The real question is why a bureaucrat wouldn't apply a bit of common sense and grant a bit of regulatory forbearance. E.g., Notify the owner they (she) is not in compliance, and grant a reasonable amount of time to become compliant, while still operating (and generating both cash flow and payroll.)

Yes, I'm aware that common sense isn't.

The regulatory forbearance didn't happen. The shop was closed until the owner complied. As it happens, her banker wasn't interested in "forbearance" either. With no possibility of generating cash flow to service her debt, the bank foreclosed and my former student came perilously close to bankruptcy proceedings. And she never re-opened her once-viable shop.

What is most interesting and telling though is related to the time frame in which all this happened - early 2010. There was a great deal of both regulatory forbearance and debt forbearance going on, elsewhere. The $700 Billion "Bailout Bill", the $900 Billion "Stimulus Bill", seemingly perpetual unemployment insurance payments, possibly endless "QE", etc., etc.

The most insidious and evil nature of this is not whether there is too much regulation or too little, or even whether any particular regulation is "good" or "bad".

The most insidious and evil nature of this is embodied solely and exclusively in selective (and arbitrarily preferential) enforcement.

Even the best laws and regulations become evil when they are only selectively enforced.

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