The minute the recent oil spill in the Gulf started, I could almost hear the calls from those who would like nothing better then to condemn this as a market failure and bring the heavy hand of government in to secure the blessings of order in a formerly anarchic soulless profit driven enterprise. Indeed, the proponents of regulation will tell one that for the past few years, regulation has been lax and the oil corporations have been allowed to run free and spoil natures virginal beauty and bounty.
Many in the mainstream media and some members of the public where shocked that the supposed regulators of the big oil companies where in bed with the oil companies themselves. For instance, there are many allegations that members of the Minerals Management Service accepted gifts, used cocaine on the job (doesn’t that make the War on Drugs seem a little hypocritical?) and in general did not act in a “regulatory” fashion. To quote from a recent USA Today article about the regulators and their role:
“The failure of the government to adopt measures demonstrates the chokehold that the companies have on federal regulators, who seldom impose rules in the face of intense opposition, the safety experts said.
“Whenever the oil industry sees some proposal they don’t like, they kill it,” said Richard Charter, senior policy adviser for marine programs at the environmental group Defenders of Wildlife. “They throw their money around.”
That is a pretty typical explanation of the power of the corporate lobbies in today’s Washington D.C. But really, the problem fundamentally isn’t that these companies seem to do their best to subvert these rules to their purposes, but that these rules exist that allow them to create privileges for themselves. This whole debacle is a good example of regulatory capture, which is endemic to the mixed economy (neither pure capitalism nor pure socialism). However, many who deplore the side effects of the mixed economy see the market as the problem, not the rules and regulations that lead to risky ventures, limited liability, and the like.
We are told that all of this will end if we just get the right people in charge — the white knights who will save us from their problems and plan solutions for us. Well, I hate to rain on the parade, but these people do not exist. Instead, we have muddied the waters of who owns what and who is responsible for what property. Because of this we are treated to an endless war of words and a blame game that can only escalate.
After all, if more regulation was needed to have prevented this spill and future spills, why not let the regulators run the businesses for the public weal? (Though if one just looks at the record of the Soviet Union on environmental problems, one will clearly see where that path leads.) If we truly want to preserve scarce natural resources in the best possible way, there is no better way then the market. Walter Block has an excellent paper on some of the problems of the Soviets in regards to the environment as well as some ideas on how the market would more successfully solve these problems here.
To return to the theme of the regulators and their misconduct, which is more common then many in our nation would like to believe, I am reminded of the words of the Old Right stalwart Frank Chodorov, who when asked about Communists in government jobs said the solution was to abolish those government jobs. I could not agree more.
Do you want to end regulatory malfeasance? Then get rid of the regulators. Only through the spontaneous order of the market and private property system could property damages be truly assessed and delineated — not through ad hoc committees or threats from a Vice President. Anything short of acknowledging the failure of the mixed economy and third way schemes between capitalism and socialism is furthering our march to serfdom and the end of modern civilization.Published in