Thursday, May 7, 2015
Business Regulations: The Two-Edged Sword
As the campaign season nears and GOP hopefuls line up for the nomination slot, we're hearing a lot more of the old Conservative rap about government regulations cripple businesses and ruin the economy. Uhuh. You won't hear any of them voicing the Libertarian attitude of fair is fair: take the regulations off everybody. None of them even stop to consider that a lot of those regulations on business were passed with the clandestine urging of the Captains of Industry themselves.
No kidding. For example, the National Labor Act established the National Labor Relations Board, the 8-hour day, the 40-hour week, and the minimum wage -- all of which the unions had been asking for -- but it also outlawed a lot of effective union tactics, such as the sit-down strike, which the bosses had serious trouble countering. That law was quietly pushed by the bosses, as much as by the unions themselves. Truth is, the bosses were willing to give some concessions about wages and hours in order to hobble the power of the unions, which had been growing steadily for the last four decades. The power and membership of the unions peaked in that decade, and have been shrinking ever since
There are other laws, usually requiring particular standards, that were likewise pushed by bosses of particular industries for no better purpose than to cripple their rivals. There's the legendary tale of the whiskey company that usually aged its whiskey seven years, which got the state legislature to pass a law requiring that all whiskey sold in the state had to have been aged in the barrel for a full seven years -- knowing that their chief competitor aged their whiskey for only five years, and had nothing older than five-years-aged product for sale, and therefore couldn't sell their product for the next two years. Consider the fate of the Tucker car, how its production was ended and its company ruined by various government regulations and bureaucracies, much to the delight of the Big Three car companies, which couldn't match the Tucker for quality.
Now what would happen, really, if all those pesky government regulations were swept away -- especially if government regulations on labor unions, consumers' unions, whistleblowers and investigative reporters were swept away too?
Konrad Lorenz told of how his dog had a snarling rivalry with a neighbor's dog, and the two of them would bark and snap and howl marvelous threats -- so long as there was a good sturdy fence between them. One day repairmen pulled down part of the fence, without informing the dogs about it. When they came outside and started their usual bark-fest, they snapped and snarled along the length of the fence until they suddenly came to the gap. Now this should have been their golden opportunity to settle the the rivalry with a roaring fight, now that there was no longer any barrier between them. Ah, but neither dog took advantage of it. After an instant's staring at each other, they both ran back to where the fence still stood, and went on with their usual threat-contest. The truth is, neither of them really wanted to deal -- unrestrained -- with each other. As Kipling put it, in his poem The Female of the Species, "...Man accepts negotiations, man accepts the compromise. Very rarely will he squarely push the logic of a fact To its ultimate conclusion in unmitigated act."
The economic Little Guys -- labor unions, consumers' unions, whistleblowers, etc -- have long endured the unrestrained power of the rich and powerful, know how to deal with such, and would be willing to take on the Big Boys in the absence of government protections. 'Tis the Big Boys who really don't want to deal with the unrestrained vengeance of their victims, with no government shield between them; the wiser heads among them remember that the Labor Wars of the early 20th century really were shooting wars, and it wasn't just the strikers who got shot.
This is why all the GOP hopefuls, when boasting of how they'd get rid of all those nasty government regulations on businesses don't really mean it. The Libertarians do. If Libertarians were to win, it would be fun to watch all those not-so-sincere pundits of the Free Market run like dogs to get back behind the fence.