Sometimes an organization has overwhelming power. “If you don’t like it, go elsewhere” isn’t a serious remedy; it’s a thinly-veiled order to shut up and submit. In such cases, we should seriously consider breaking the overpowered organization into smaller parts to restore competition. Until competition returns, however, regulation is a helpful stopgap. Just because you own an essential resource doesn’t entitle you to use it however you please.
And that’s why governments should be strictly regulated. If any organization has monopoly power coming out the wazoo, they do. Leaving your country is an enormous burden for the average person. Furthermore, the worse your country is, the less likely other countries are to admit you. Using the political process to redress abuse is a pipe dream even if you’re a citizen. And if a foreign government mistreats you, your only real recourse is to beg for mercy.
What kind of regulations should governments face? Some are already on the books in some places: free speech, freedom of religion, bans on uncompensated expropriation. But as a practical matter, the world’s governments remain virtually unbridled.
Almost nothing stops governments from charging exorbitant taxes for shoddy services. This has to end. For example, governments could be required to tax each individual no more than twice the fair market value of the services they receive. And an outside body, not dependent on the government, should set “fair market value.”
Almost nothing stops governments from negligently killing innocent foreigners. This has to end. For example, governments could be required to prove that any foreigners they kill in military action were in fact hostile combatants. An outside body, not dependent on the government, should weigh this evidence. Any government that fails to meet this burden should be forced to pay millions of dollars of restitution per presumed victim.
Almost nothing stops governments from strangling construction, leaving most of the population without affordable housing. This has to end. For example, governments that disallow a construction project could be required to prove that it poses a clear and present danger to human safety. An outside body, not dependent on the government, should adjudicate this. Any government that fails to meet this burden should be held in contempt of court and removed from office.
Almost nothing stops governments from callously excluding desperate foreigners. Even if you’re likely to die without asylum, governments can casually refuse. This has to end. For example, governments could be required to prove that asylum seekers will be safe in their home countries if they aren’t admitted. An outside body, not dependent on the government, should make the call. Any government that defies its decision should be fined millions of dollars of restitution per victim.
If your reaction to any of these proposals is to talk about “sovereignty,” you’re part of the problem. Granting a restaurant owner full sovereignty is harmless because it’s just one restaurant. Granting a government full sovereignty, in contrast, is a recipe for massive, habitual abuse. We need to stop imagining that they’re sacred, or entitled to do whatever they want with what they own – and we have to stop pretending that democracy is an effective check. What good is democracy if you’re perpetually in the minority? What good is democracy if you can’t vote because you’re not even a citizen?
Lately I’ve been hearing numerous demands to regulate Google, Amazon, Facebook, and Twitter. I think these demands are overblown because countless excellent, viable substitutes remain. But the pro-regulation activists’ fundamental premise is not crazy. Regulation can and should rein in grotesquely abusive monopolies who act like they’re entitled to treat people like dirt… and every government on Earth readily fits this description. Yes, even Norway. Let’s get governments fully under control, then argue whether search engines and online superstores are in the same league as the monopolists par excellence.
READER COMMENTS
Doug Anderson
Sep 18 2018 at 3:55pm
“Almost nothing stops governments from callously excluding desperate foreigners.” There is another element to this: regulation of immigration by other countries plays a big part in shoring up the monopoly power of the state in that it prevents people from leaving to go to more favorable states with the attendant competitive pressures that brings. At least we have free trade. Oh wait…
Steve S
Sep 18 2018 at 4:35pm
How do we keep this outside body from being corrupted? Do we ask the world’s independently wealthy citizens to make these decisions, so that a few million in potential kickbacks wouldn’t be enough to make them “decide” one way or another in a government’s favor?
I’d really like to hear a realistic breakdown of how this would be setup and how it could be kept on the up-and-up. Otherwise it’s just Government 2.0.
Wade
Sep 18 2018 at 6:48pm
I took this as merely a rhetorical device to show how much worse government is than tech giants. Another guess I have is that he’s envisioning something like the private sector arbiters David D. Friedman proposed in “The Machinery of Freedom.”
Denver
Sep 18 2018 at 4:57pm
I’m not sure I agree.
First, I’m not fully convinced that the concept of a “monopoly” is actually coherent. Even the market analysis of monopolies you learn in basic econ is really just an analysis of substitutability. There are many markets in the world you can look at with only one seller, but there are very few goods which are truly unsubstitutable. For example, Nabisco is the only seller of Oreo cookies, but I would have a hard time calling Nabisco a monopoly in any sense of the word. Maybe Nabisco has a monopoly amongst people with extremely high preferences for Oreo cookies, but even then the company is in competition with all the companies that sell ingredients to Oreo cookies (as consumers do have the option of making their own at home). You have to do some pretty hard squinting to look at Nabisco and think it’s a monopoly that ought to be regulated.
And while it’s easy, especially for libertarians, to say “the state has a monopoly on legal services”, that’s not entirely true, as there are plenty of substitutes for state provided legal services. Most obviously, resolving your disputes outside of the legal system.
That doesn’t mean firms, including the state, can’t use their unsubstitutablity to leverage the market. But actually identifying unsubstitutablity, and how to correctly regulate it, is exceedingly difficult.
So I agree that the state ought to be regulated. But that’s because I believe the state is fundamentally immoral, and we ought to regulate clearly immoral acts. Not because monopolistic regulation in general is a valid argument.
BC
Sep 18 2018 at 7:19pm
Applying to government the pro-regulation arguments typically applied to regulating private entities exposes the flaws both in government and the pro-regulation arguments.
In a similar vein, I advocate private sector intervention to address public sector failures. Contra public sector purists, democracy does not guarantee that government always behaves optimally. Public choice theory reveals many modes of “government failure”, including the phenomenon of special interests deriving concentrated benefits by imposing dispersed costs. One example is the taxi medallion cartels that existed before Uber. Uber fixed that government failure by disregarding the medallion requirements, invoking a just plausible enough argument that a ride-sharing network is not a taxi service. Similar common-sense private sector interventions could fix other public sector failures: AirBnB to fix hotel cartels, still to be invented “sharing networks” to fix burdensome occupational licensing, and perhaps even an intervention to build needed housing despite zoning laws. Unfortunately, these other common-sense interventions seem to be facing more resistance from public sector purists. Despite the obvious need for common-sense solutions, the public sector purists obstinately cling to their government ideology.
Sebastian Roth
Sep 19 2018 at 9:21am
This seems like a case of ‘who regulates the regulators?’.
Having a independent shadow organizations set up for this might work in specific cases where neutral goals are easy enough to formulate and control (e.g. central banking and money supply).
Another solution might be to intensify competition between the regulating bodies by decreasing regulative reach. Which would mean less regulative authority at the nation level and more at the city/regional level. Moving cities is still expensive but way cheaper than moving countries. Extra thought has to be put into which body of regulation is best deployed on which level to find a optimal balance. Ending up with too independent/competitive government on local levels might also lead to higher costs of nationwide cooperation and business or lead to local tax heavens.
Robert EV
Sep 19 2018 at 11:01am
Who pays the regulators to regulate?
Even independently wealthy regulators still get their independent wealth somewhere, and have every normal incentive to be especially regulatory against government regulations which propose to regulate their cash cows.
Bill
Sep 19 2018 at 11:46am
Fining government for misdeeds? The burden of the fine falls on folks (taxpayers) who were not parties to the misdeeds.
P Burgos
Sep 19 2018 at 3:46pm
You and whose army? I feel like all libertarian arguments fail to grapple with the fact that at some level, violence is needed to check violence, and the capacity to do violence to other people requires things of humans that aren’t really consistent with viewing everything as a “state of nature” or “property rights”. At the end of the day you always need someone (or a group of people) with weapons to enforce the rules against other people who have weapons, and that is an unsolvable problem because there is always someone with weapons lying around, and the implicit threat that they might use them.
Weir
Sep 19 2018 at 6:12pm
The European Commission is going after Google, Amazon, Facebook, Uber, and Airbnb.
Its most fervent supporters picture the European Commission as an outside body, not dependent on any sovereign or democratic or vote-seeking government. A supranational body. But supranational regulations, in practice, look a lot like national regulations. Maybe getting rid of the voters isn’t enough?
You can take democracy out of government but if the problem is government itself then you haven’t solved the problems of government.
In place of a hefty national subsidy bill you get a hefty supranational subsidy bill. Instead of expensive national tariffs you get expensive supranational tariffs. Instead of banning vaping and GMOs and halogen bulbs in one country the European Commission bans all the things in all the countries.
So it can’t all be the fault of the voters. Even an unelected government can impose bad policies. Being outside of politics isn’t enough.
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