How Regulations Suffocate the Economy and Restricts Freedom

Sovereign Man’s Simon Black on the deleterious effects of soaring regulations (bold mine)

On March 16, 1936, the government of the United States published the very first edition of the Federal Register.

President Roosevelt had been taking a lot of heat over the previous year; under his New Deal program, dozens of government agencies were passing new rules, regulations, and codes at an absolutely feverish pace.

It became impossible for anyone to keep track of them—even the other agencies within the government.

So in the summer of 1935 they created a new law requiring every executive agency to publish a daily, official record of their activities.

This official record was called the Federal Register. And it would contain a complete set of every rule, regulation, code, and proposal issued by each of the executive agencies.

The first edition was published on March 16, 1936. It was sixteen pages.

Every single work day since then, without fail, the government has published the Federal Register.

Its first full year (1937) contained a total of 3,450 pages. By 1942, the Federal Register had grown to over 10,000 pages.

It passed 20,000 for the first time in 1967. More than 30,000 in 1973. And more than 40,000 the following year in 1974.

The Federal Register exploded during the 1970s, in fact, touching nearly 90,000 pages by the end of the Carter administration.

During Reagan’s time, the publication shrank to under 50,000, only to rise again under subsequent presidents.

The longest edition ever published was logged at 6,653 pages in a single day, during the administration of Bush II.

President Obama has averaged nearly 80,000 pages per year, far and away the highest of any President in US history.

This morning’s edition, in fact, is a whopping 358 pages full of new rules, regulations, and proposals.

Did you read it? Neither did I. But as the old saying goes, ignorance of the law is not an excuse.

This is absurd. Every single one of those regulations makes people less free.

They criminalize the most innocent behavior and make it impossible for the average person to know what’s legal and what’s not as if we all have some some civic duty to read and memorize 80,000 pages per year of government regulation.

4,500 criminal statutes now exist under US Code. That’s 1,500 times more than the three crimes outlined in the Constitution– piracy, treason, and counterfeiting.

(Ironically, the Federal Reserve and commercial banks commit the latter on a daily basis…)

We’ve seen this theme countless times throughout history.

Under Diocletian’s reign, the Roman Empire’s body of laws and regulations multiplied like rabbits.

He centralized all aspects of the economy, controlling wages, prices, commerce, and agricultural activity. Violations in many cases were subject to the death penalty.

And when people complained, he told them that the barbarians were at the gate, and that individual liberty needed to be sacrificed for the greater good of security.

By Diocletian’s time, Rome was already bankrupt. His regulations pushed the Empire over the edge.

It’s not much different today. Each and every one of these obscure regulations COSTS MONEY.

So it’s not surprising that as the number of pages in the Federal Register has increased, so has the US federal debt.

In order to pay for all of this bureaucracy, every citizen has become subject to an increasingly complex and punitive tax system, enforced at the point of a gun by a bankrupt government desperate to keep the party going.

Let me add graphics of…

…the US government budget (deficit spending), and the...

...US federal debt. Both charts have been sourced from the Heritage Foundation

Yet the link between regulation and debt.

Every enacted regulation needs enforcement. Enforcement entails spending. And spending requires financing. Government financing are sourced from taxes, debt and inflation. Essentially, every increase in regulation entails higher taxes, debt or inflation. Hence, “Each and every one of these obscure regulations COSTS MONEY.”

And if the tax revenues can’t keep up with the pace of regulatory profligacy, thus the recourse towards deficit spending financed by debt: as “Federal Register has increased, so has the US federal debt.”

In addition, desperate governments will dragoon its citizens via innovative and increasingly repressive tax regimes, thereby “to pay for all of this bureaucracy, every citizen has become subject to an increasingly complex and punitive tax system, enforced at the point of a gun by a bankrupt government desperate to keep the party going.”

Yet every government spending represents resources extracted from the private sector, and mostly, resources taken away from the productive agents of the economy. Hence, regulatory overload impedes economic activities, and consequently, spawns black markets.

In addition, there are costs (time, effort and resources) to comply with regulations.

Economist Robert Higgs on estimated compliance costs endured by the US economy:

According to Wayne Crews, who makes an annual estimate of the cost of compliance with federal regulations alone, “Costs for Americans to comply with federal regulations reached $1.863 trillion in 2013”—which is equivalent to more than 13 percent of national income. Compliance with state and local government regulations surely adds a large amount to Crews’s estimate for federal compliance alone. No one needs to tell Americans, however, how onerous and exasperating the entire mass of government regulations and related red tape has become. Virtually every part of economic and social life now bears these heavy burdens, and any truly meaningful appraisal of the size of government today must take them into consideration along with the amounts the various governments are spending.

Even more, increasing regulations drives a chasm between the economic (productive) class and the political (parasitical) class, making the former subservient to the latter.

In her classic novel Atlas Shrugged, the late Ayn Rand honed in such politically induced societal entropy...

Money is the barometer of a society's virtue. When you see that trading is done, not by consent, but by compulsion- When you see that in order to produce, you need to obtain permission from men who produce nothing- when you see that money is flowing to those who deal, not in goods, but in favors- when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you- when you see corruption being rewarded and honesty becoming a self-sacrifice - you may know that your society is doomed.

Yet this is a universal phenomenon or applies to every government.

Regulating people’s lives means LESS freedom. 

Arbitrary regulations, not only "criminalize the most innocent behavior" for being ignorant of what's legal and what's not, instead they have frequently been used as instruments of repression based on political expediency and the advancement of power over the citizenry. 

Therefore, increasing enactments of arbitrary regulations signify a slippery slope path towards corruption and dictatorship.

As Roman lawyer, orator and senator Publius Tacitus wrote (Annals 117 Book III, 27) Corruptissima re publica plurimae leges (The more numerous the laws, the more corrupt the government.)