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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