Dean Baker slices up Niall Ferguson’s latest op-ed in The Wall Street Journal—this one about how over-regulated the U.S. supposedly is.
Baker writes that “It’s fair to say that just about everything in the piece is wrong,” and he’s right:
Ferguson then cites a number of hack studies that find enormous costs to regulation. The main trick in this sort of study is to add up every possible cost associated with restrictions without taking account of the benefits of these regulations.
Suppose we had a new law that allowed oil, gas, and other mineral companies to dig up anyone’s property without any compensation whatsoever. This would undoubtedly lead to huge growth in these extractive industries and a big gain in GDP that the Fergusons of the world would celebrate.
Of course there would be no accounting of the destruction to people’s property or the loss in value they may experience as a result of having an oil rig next to their front porch.
But what baffled me about Ferguson’s op-ed is how he compares the present-day United States to the U.S. Tocqueville found in the 1830’s without acknowledging some rather basic differences between the agrarian country of two centuries ago and the post-industrial one of today.
“Instead of joining together to get things done, Americans have increasingly become dependent on Washington,” he writes, without bothering to think about why the state has grown.
Unlike Frenchmen, (Tocqueville) continued, who instinctively looked to the state to provide economic and social order, Americans relied on their own efforts. “In the United States, they associate for the goals of public security, of commerce and industry, of morality and religion. There is nothing the human will despairs of attaining by the free action of the collective power of individuals.”
The U.S. was a virtually unoccupied country in 1830, with just 7 people living in the average square mile. Its biggest city, New York, was about the size of modern-day Fayetteville, North Carolina, and Boston was the size of 2013 Bismarck, North Dakota.
We now have about 89 people per square mile, despite having since doubled in land mass. Population density increases anonymity and makes it harder for neighbors to get together for that barn-raising or whatever its modern urban equivalent would be. Yoga-studio erecting?
Density and urbanization also means that what you do is exponentially more likely to affect your neighbors than it was when the average family had half a section. And the technology we have today is far more powerful and potentially dangerous than anything they had back then.
Extensive regulation then is a natural byproduct of densification and modernization, which are themselves natural byproducts of the free-market capitalism Ferguson espouses.
If Ferguson wants 1830s-style regulation and associational life, he needs a Jeffersonian agrarian republic. I very much doubt he wants that.
There are a lot of unsupported assertions and analysis in this piece.
"Population density increases anonymity and makes it harder for neighbors to get together for that barn-raising or whatever its modern urban equivalent would be. Yoga-studio erecting?"
Why would proximity increase anonymity? If anything, it should drastically decrease it. It is easier to get together for yoga class or pickup basketball in a denser environment, not harder. By this rationale, suburban neighbors should be less anonymous, since their neighborhoods are less dense than urban neighborhoods. Do you find that to be the case?
I agree that anonymity has likely increased over the last century, though maybe not from Tocqueville's time, but I don't think density is the reason.
"Density and urbanization also means that what you do is exponentially more likely to affect your neighbors than it was when the average family had half a section. And the technology we have today is far more powerful and potentially dangerous than anything they had back then."
Perhaps that was true a century ago, when you'd have problems even getting running water, but urban residents today can live almost completely encapsulated lives, which has nothing to do with govt and everything to do with technology.
What tech do we have now which "is far more powerful and potentially dangerous than anything they had back then?" It's not like they didn't have guns back then or that a carriage couldn't tear you up like any car.
"Extensive regulation then is a natural byproduct of densification and modernization, which are themselves natural byproducts of the free-market capitalism Ferguson espouses."
I don't know about "natural byproduct" but yes, regulation is a result of how rich free-market capitalism has made us, that a bunch of stupid people then force us to throw so much of those gains away through horribly over-reaching overregulation. We are so rich through markets that we can afford to flush money down the drain through these regulations, for no rational reason, and still be better off. That won't last, look at Europe.
#1 Posted by Ajay, CJR on Fri 21 Jun 2013 at 12:34 PM
yes, yes, ajay is totally right, those 4-mile an hour horse-drawn carriages could certainly produce as much devastation on pedestrians as a 3-ton SUV going 40 or 50 or 70 mph. it's only common sense.
and a musket certainly could do as much damage as an AK47 or a flamethrower or missile launcher. who could argue otherwise? remember all those mass murder school shooting sprees in the 1830s?
#2 Posted by hwm, CJR on Fri 21 Jun 2013 at 05:30 PM
Never lived in a rural area, have you, Ajay.
#3 Posted by Jane, CJR on Fri 21 Jun 2013 at 05:31 PM
Seems that everyone is making unsupportable claims here. Ferguson always does, sadly (I wish he was more careful, since he is a conservative, as am I), but so does our favorite Marxist economist, Baker. Every single assertion made by Baker is completely ridiculous, IMHO as an economic historian (of minor note). No idea where he gets his facts OR his conclusions.
#4 Posted by Pasadena Ed, CJR on Sun 23 Jun 2013 at 03:15 PM
"Suppose we had a new law that allowed oil, gas, and other mineral companies to dig up anyone’s property without any compensation whatsoever."
That's already the case, and it's the opposite of laissez-faire capitalism. It's fascism. Certain industries get undue protection and eminent domain through govt "laws." Please stop inverting reality to further your primitive statist ideology. Thanks, an advance.
#5 Posted by Dan A., CJR on Sun 23 Jun 2013 at 04:40 PM
I get that two opinion columnists disagree with one another about politics and Chittum agrees with one of them and not the other. What does this have to do with journalism, and why does it belong in CJR?
#6 Posted by Tom T., CJR on Mon 24 Jun 2013 at 11:10 AM
I look forward to Ryan's piece explaining why California's chronic fiscal crises and job-growth stagnation over the past generation has nothing to do with the state's zealous regulatory regime, particularly in the areas of environmental and health rules. Better yet, I'd look forward to his own personal experience trying to start a small business in California. Also valuable would be his exegesis of how the economic recoveries of Germany, to take the most obvious example, or Sweden, that never-never land of naive American Democrats, was only coincidentally related to the deregulation of those countries' economise after the doldrums of the 1990s, particulary in the area of labor markets and mandated benefits. The dead hand of the state is the principal reason for the Euro crisis from Spain to Greece, but if there is any private-economy dysfunction, that is what is cherry-picked as the villain by worshippers of the state.
There really is a sensiblity (whose motives are obvious) within the chattering classes that the state can do it better, the state can do it cheaper, and it ain't gonna cost anybody anything. The above article boils down to 'I don't agree with it, in terms of my values and aspirations, so it must be scientifically wrong'.
#7 Posted by Mark Richard, CJR on Mon 24 Jun 2013 at 12:47 PM
Hmm, I posted a long response last week, but because I dared to use some links, it was hoisted into the spamtrap, which CJR have not bothered to release. Here it is again:
hwm, no wonder you're so off if you think horse-drawn carriages only went 4 miles per hour. :)
There is nothing new under the sun. Long before the recent Boston marathon bombing that killed three people, there was the Haymarket bombing of 1886, which killed at least 11, after the ensuing gunfire. The notion that we need government to keep us safe from these long-standing problems of man, either through gun control or similar regulation or snooping through all our calls and emails, is a canard.
As for mass shooting sprees, I suggest you actually look at the data. There is no evidence of an increase in mass shootings in the last 30 years, even though the number of guns per capita almost doubled during that span. There may be a lot more publicity about these horrible incidents through our increased communications during that period, but certainly not incidents.
#8 Posted by Ajay, CJR on Wed 26 Jun 2013 at 03:38 AM
Here's the rest:
Gun homicides have dropped by half in the last twenty years, a time when concealed carry and gun ownership was going up, trends most aren't aware of.
I used to be squishy on gun control till I examined the data. Now, there's no argument, gun control is a bad idea, yet another regulation that doesn't hold up.
Jane, no, I haven't. Are you about to argue that those in rural areas know each other very well or that they don't?
#9 Posted by Ajay, CJR on Wed 26 Jun 2013 at 03:40 AM