Too much regulation is everybody’s problem

By: on April 26, 2016 |

Carter

It has become an article of faith on the conservative side of the political spectrum that regulations on business are an outgrowth of an overweening, paternalistic government. The stereotype of high-handed, know-it-all bureaucrats acting in a set of misguided quests to serve one progressivist lobby or another at the expense of economic growth is a well-worn one. In this way of thinking, regulation writ large becomes not just a consequence of bureaucracy itself, but rather an expression of an anti-business ideological framework. Opposition to conceptual “regulation”, rather than specific problematic regulations, then acquires a totemic importance beyond its actual impacts.

Progressives, eager to counter what they see as a distorted narrative, then happily rush in to defend the necessity of this “regulation”. Usually, they will cite the sort of examples most everyone agrees on (preventions on dumping raw sewage into a river, seatbelts in cars, etc.), but they often use these as an end-run to defend or advocate for rules that are plainly quixotic or nonsensical. Clearly, something more is happening in this discussion than meets the eye. With the regulatory process for pipeline development in Canada coming under particular scrutiny in recent months, now is a good time for reconsideration of approach to regulation.

Left and right recognize that regulations are rules adopted by governments which attempt to serve some type of defined public interest (health, environmental protection, etc.). The point of contention, then, is whether these public interests are legitimate, and whether the particular rules have cost burdens which outweigh the benefits. It’s true that conservatives tend to set the bar for regulatory intervention relatively higher than progressives. It is crucial to note, though, that neither side in this argument questions what the essential intent of the regulations adopted are. In other words, both left and right are in agreement that regulations, in the main, constitute a pro-government and anti-business action.

In reality, it’s not that simple. Take, for example, the regulation of food trucks, which has strangely consumed a great deal of the time of city councils across the country. The slow pace of red tape cutbacks in relation to mobile eateries is most often attributed to hand-wringing over food safety. The truth is, though, that the most vociferous opposition to the trucks comes from brick-and-mortar restaurants (who often have deep pockets and/or political connections), trying to shut out potential competitors.

On pipelines, the right assumes everyone on the left is trying to tie them in regulatory knots. It’s true the federal New Democratic Party voted to discuss (though not, it should be made clear, adopt as policy) the LEAP manifesto, which explicitly deep-sixes all further oil sands development. But, at that same convention, Alberta NDP Premier Rachel Notley’s pro-pipeline speech was very well-received. As Canada’s only NDP government left standing after this month’s rout in Manitoba, Notley’s administration is adding progressive muscle to pipeline advocacy.

The biggest single current roadblock to the Energy East pipeline is the Quebec Liberal government, which in many aspects of fiscal and economic policy is the most conservative Quebec government in decades (notwithstanding its recent injection of support for corporate welfare junkie Bombardier). Quebec’s opposition to Energy East has little real grounding in environmental protection – just ask the victims of the Lac Megantic oil train disaster – but is rooted in pure emotional NIMBYism and naked economic self-interest, a shakedown for a share of oil revenue in the name of the environment.

Opposition to development is not the monopoly of leftism or Luddism: it is a force which knows no governing creed and often expresses itself in the most reactionary of ways. In the Greater Toronto Area, for example, micro-regulatory paralysis in zoning laws or determining the heights of flower beds mostly stems from pure, non-ideological selfishness. Politicians and bureaucrats capitulate to demands for these sorts of restrictions from incumbent businesses attempting to block new competition or local busybodies who think – usually mistakenly – that they’re protecting their property values. One can certainly oppose these actions, but the automatic conflation of NIMBYism with progressive politics ignores the role that businesses often play in crafting regulation with profits in mind. Conservatives who live by the old adage of being “pro-market, not pro-business” would do well to start to take this on, much as the Fraser Institute has consistently spoken out against corporate welfare.

At the same time, progressives should be more willing to admit when regulations have failed and when they serve no legitimate public interest. At least in part, the debate around Uber is an example of this, having put many people ostensibly on the left in the position of defending the government-protected oligopoly that is the taxicab medallion system. A kind of reflexive defense of existing regulation may have developed in response to overly simplistic right-wing rhetoric, but, it nevertheless testifies to a lack of critical analysis.

In fact, it is in these instances where left and right should be able to find common ground, if they truly believe what they profess. Regulatory capture by particular companies, as in Canada’s telecoms industry, all but guarantees that the principles of both consumer protection and free market competition will be violated. Rather than continuing to slug it out over the phantom definition of regulation that they have both constructed, both sides should deal with sets of regulations on their own terms. In opposing those that mainly protect private, rather than public, interests, they’ll find they have more in common than they thought.

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Carter Vance is an MA candidate in Political Economy at Carleton University and a former co-chair of the University of Ottawa New Democratic Party.


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About Carter Vance

Carter Vance is an MA candidate in Political Economy at Carleton University in Ottawa.