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1 Regulation 12 (1977)
A Regulated Society

handle is hein.journals/rcatorbg1 and id is 12 raw text is: ARegulated Society? Irving Kristol N o reasonable person is in principle op- posed to all government regulation. None of us wants to coat our walls with a paint that slowly poisons the air we breathe, just as none of us wants our kids to wear pajamas that have been treated with a carcino- genic chemical. It is true that, in theory, a free market can cope with problems such as these. The manufacturers of lead-free paint or Tris- free pajamas should simply be able to take the market away from the others. But this involves creating and disseminating to the entire popu- lation an enormous amount of accurate infor- mation (some of it highly technical) about a vast range of products-information, more- over, which changes rapidly. There really is no efficient way to achieve this. It is absurd to expect consumers to become experts in such matters, when most of them have neither the capability nor the time. They can compare prices easily enough, and can roughly compare the quality of competing items-but when 'quality involves fairly arcane scientific knowledge, the communications system repre- sented by a free market breaks down, so far as the ordinary person is concerned. It is for this reason that all nations regu- late their medical professions at least to the degree of certifying who is a doctor and who is not. The assumption behind such regulation is that the consumer is in no position to make the certification decision for himself-as most of us know and freely admit. And it is for this same reason that the drug companies would be the first to oppose the idea that drugs should go completely unregulated. They fear, quite properly, that such havoc would be wreaked as Irving Kristol is a resident scholar at the Ameri- can Enterprise Institute and chairman of the Ad- visory Council of AEI's Center for the Study of Government Regulation. He is also co-editor of the quarterly The Public Interest and a member of the Wall Street Journal's Board of Contributors. 12 AEI JOURNAL ON GOVERNMENT AND SOCIETY to result, in the end, in a state-owned monopoly to protect the consumer against his own vul- nerable ignorance. So there is no argument about regulation in principle, and the polar distinction between the regulation of commercial transactions and the free market, so often heard, is not very meaningful in practice. Moreover, it is reason- able to expect that in a more densely popu- lated society, consuming an ever-greater variety of technically sophisticated goods, there would be more regulation rather than less. People will want greater protection against their own in- capacities as consumers. They will also, of course, want protection from the side effects (the externalities) of other people's activities as producers, which now are observed to affect them to an ever-increasing degree. Such ob- servations themselves are often the result of more sophisticated scientific inquiry, which uncovers externalities we were not previously aware of. But the same complexities that give rise to more government regulation also make ef- fective regulation a very difficult enterprise. The hard questions are: what kind of ap- proach should be used, where, and to what degree-questions that merit sober, informed, and prudent judgment. And one may wonder: can such judgments be made by people who are eager, as many among us are, to use the regulatory mechanism as a lever for trans- forming the social and economic order as a whole? I have in mind the people-the New Class as they have come to be called-who do not, on balance, like a free, commercial society: that is, a society shaped by voluntary commercial transactions among consenting adults, in short, one whose central economic institution is the marketplace. They sincerely believe that a powerful government, in which they have positions of authority, can order things better. If one designates them, in a

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