Here is the third article in a series on regulation I have been publishing at FEE: “Government Regulators are Monopolies.” It is part of a project to challenge the validity of government “regulation,” which should more properly be called government “restriction,” as that word describes what government agencies mostly do: they restrict people’s freedom to make voluntary exchanges.
The aim of the project is to reduce government restriction of freedom by showing that there is a better alternative—regulation by market forces.
The first article in the series, “There Is No Such Thing as an Unregulated Market,” shows that government regulation is not the only kind of regulation; free markets are closely regulated by the free choices of market participants. So which kind of regulation works better? The second article, “Government Regulators are Unregulated,” begins to examine that question, showing that because government agencies are accountable upward in the political process to ever more distant and unconcerned elected officials and rationally ignorant voters, they are in practice not accountable at all.
This third piece shows further that
government agencies that regulate … quality and safety … are legal monopolies. Those they regulate are required to abide by the government agencies’ decisions; the regulated enterprises have no freedom to choose different quality-assurance services from some competing entity instead.
In short, government regulatory agencies are themselves unregulated monopolies, unaccountable in any meaningful way to the public they are supposed to serve.
There is a better way. Upcoming articles in the series will show how regulation by market forces works, and why it works better than government “regulation.”
Those who would like to read a more fully fleshed-out presentation of these ideas (academically oriented but I hope still clear and accessible) will find it in my Cato Journal article on which the series is based, “Regulating Regulators: Government vs. Markets.”