Delve into the history of regulation and deregulation, revealing how scandals spark new rules that sometimes grow excessive. Discover eccentric laws, like Argentina's regulatory maze and the UK's Salmon Act, illustrating how excessive regulations can stifle economies. Explore the delicate balance between innovation and regulatory measures in tech and finance. Examine the Jones Act's unintended consequences and critique its effectiveness in promoting shipbuilding while hindering trade. Join the conversation on finding regulatory harmony for sustainable economic growth.
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question_answer ANECDOTE
Wacky Laws Around the World
Handling salmon suspiciously is a jailable offense in the UK.
Wearing lacy underwear is illegal in Russia, Belarus, and Kazakhstan.
question_answer ANECDOTE
Hitchens' Law-Breaking Spree
Christopher Hitchens intentionally broke pointless New York City laws.
His actions highlighted the absurdity of excessive regulation.
insights INSIGHT
Justified vs. Excessive Regulation
Excessive "red tape" regulation contrasts with justified regulation.
Stigler and Friedland's 1962 research showed regulation's effects can be less than expected.
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In this book, Milton and Rose Friedman argue that free-market principles are more effective than government intervention in achieving economic prosperity and personal freedom. They critique the explosion of laws, regulations, agencies, and spending in Washington, highlighting how these have eroded freedom and undermined affluence. The book provides examples of how free markets have succeeded in various historical contexts, such as Hong Kong and the United States before the Great Depression, and contrasts these with the failures of centralized planning in countries like India. The authors also propose remedies for various economic and social issues, including education, inflation, and consumer protection, advocating for a minimalist economic policy and greater personal freedom[1][2][5].
There is a long history of regulation and deregulation where big scandals provide the catalyst for new rules, and then the realization that the rules are possibly excessive has caused them to be rolled back.
In finance the 1933 Glass-Steagall provisions came in the wake of the 1929 Crash. The 2002 Sarbanes-Oxley Act was a reaction to the Enron and WorldCom scandals. Dodd-Frank was enacted in 2010 after the 2008 financial crisis.
Good regulation can bring all sorts of benefits, but excessive regulation, does little to serve the public interest, and creates financial costs and frustration for businesses and the public.
Elon Musk has vowed to dismantle thousands of federal regulations as the co-head of the Department of Government Efficiency, or DOGE, saying the nation’s financial security depends on it. Is he right, and if so, what rules need to go first?
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Additional Reading:
https://regulatorystudies.columbian.gwu.edu/brief-history-regulation-and-deregulation
An Evaluation of Consumer Protection Legislation: The 1962 Drug Amendments | Journal of Political Economy: Vol 81, No 5
https://www.cato.org/publications/policy-analysis/jones-act-burden-america-can-no-longer-bear#conclusion
https://worksinprogress.co/issue/how-madrid-built-its-metro-cheaply/
Milton Friedman Video: https://www.youtube.com/watch?v=dZL25NSLhEA
A history of regulation and deregulation: https://regulatorystudies.columbian.gwu.edu/brief-history-regulation-and-deregulation
Weird Laws Around the World: https://www.farandwide.com/s/weird-laws-world-4961c1ede8d749bf
Patrick Boyle On Finance 