Posts tagged regulation
FRICTION TAPE
Inspired by agitators
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We already have crowd sourcing in elections, in a huge, diverse electorate with literally millions of small donors and volunteers. The reality is that government involvement in financing elections has - as is so often true with regulation - constrained and narrowed the range of ideas, debate, and competition; and hampered grassroots political activity. A bad idea doesn’t become a good idea because a group of business executives endorse it.
That’s Capital University law professor, Center for Competitive Politics chairman, and former FEC Commissioner Brad Smith, responding to tech industry calls for government mandated Kickstarter-style crowd-sourced funding of elections.
As a guy who used to work for lobbyists for the tech industry, let me add that the tech industry folks pushing this would love this kind of carve-out, precisely because they’re the very technologists who would design, run, and profit from such systems. It’s no surprise that, since there’s not much demand for such a thing, much less venture capital funding for it, they’re trying to use government to mandate it into law.
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Regulatory Compliance Costs Don’t Always Have a Dollar Figure Attached
![Matthieu Riegler, CC-by [CC-BY-3.0 (http://creativecommons.org/licenses/by/3.0) or CC-BY-3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons](http://upload.wikimedia.org/wikipedia/commons/9/97/Fran%C3%A7ois_Hollande_-_Janvier_2012.jpg)
Recently elected socialist French president François Hollande.
While I’m not sure I always buy whole-hog the amorphous concept of “regulatory uncertainty,” brought on by the administrative state, as a catch-all explanation for everything wrong with the private sector and our nation’s current unemployment crisis, a fascinating Bloomberg Businessweek Global Economics feature from May 2012 looks at French labor policy (emphasis mine):
[France] has 2.4 times as many companies with 49 employees as with 50. What difference does one employee make? Plenty, according to the French labor code. Once a company has at least 50 employees inside France, management must create three worker councils, introduce profit sharing, and submit restructuring plans to the councils if the company decides to fire workers for economic reasons.
French businesspeople often skirt these restraints by creating new companies rather than expanding existing ones.
In the U.S. we talk a lot about compliance costs associated with the regulatory state; companies hire legions of attorneys and accountants to make sure the books are squeaky clean and that operations comply with government mandates. Free market proponents argue (correctly in my view) that capital dedicated to those particular human resources could, in general, be applied to more productive ends, and everyone would be better off. Sarbanes-Oxley compliance, for example, takes a lot of high-skill man hours to achieve. High-skill man hours mean high-dollar salaries, and those salaries and man hours are both quantifiable; they can be put into monetary terms when calculating the cost of the regulatory burden.
In France, according to the article, unemployment is the cost. We can count the unemployed, sure; but it is more difficult to count the number of unemployed whose situation can be explained by companies’ inabilities to achieve economies of scale because of burdensome labor policy that keeps companies small. That doesn’t mean it’s not worth considering or reforming.
