In my recent letter to various public officials opposing proposed legislation on mandatory insurance, I wrote:
If your goal is to fix the genuine problems in our health care system, then you MUST advocate FREE MARKET reforms. Eliminate the tax incentive for employer-provided health care. Eliminate all mandates and other regulations on health insurance. Eliminate regulations on medical providers. Gradually eliminate welfare programs.
A few days ago, I received the following e-mail inquiry about the implications of that paragraph in particular. It said:
Do you advocate eliminating most or all business and financial regulations in addition to the medical regulations mentioned above? If objectivism and the business/economic beliefs of Ayn Rand were to be law of the land, for lack of a better phrase, how would such a government prevent abuses by businesses and protect the consumer’s rights from being trampled on?
Those are excellent questions. I’ll answer them briefly here, and I hope that others will chime in with more in-depth analysis in the comments.
Yes, I do advocate the repeal of all business and financial regulations. However, that does not imply that the law has no proper function to serve in markets. In the purely capitalist economy that I advocate, the legal system serves an indispensable role: it protects the rights of all people, particularly the rights of property and contract. If a business engages in false advertising, fails to deliver the contracted-for goods, or knowingly sells dangerously defective products, then individuals should be able to resort to the courts to remedy the violation of their rights.
In contrast, when the government establishes regulations “prevent abuses by business” and “protect consumer’s rights,” then it is actually violating the rights of both producers and consumers, not protecting them. Regulations violate everyone’s rights to acquire, use, and dispose of their property as they see fit. Regulations violate everyone’s rights to contract for mutually agreeable terms. In essence, regulations use government force to prevent people from acting according to their own best judgment. That’s morally wrong and practically disastrous.
If I’m dying of cancer with three months to live, the FDA forbids me from taking a promising experimental drug because it’s not yet been proven “safe” and “effective.” As if that matters: I’m dying! Supposedly, FDA regulations exist to protect me, the consumer.
If I lack work experience, minimum wage laws forbid a business from hiring me except for more than I’m actually worth. So I’m forced into unemployment, even though I’d be happy to gain experience and reputation as a good worker by working for less than minimum wage for a time. Supposedly, minimum wage laws exist to protect me, the worker.
If I’m a good cook looking to start a small catering business, I would be stopped dead in my tracks by the myriad regulations required to serve food and liquor. So my potential consumers have to pay more for their catering because the cost of entering the market is so high, even if they’d rather hire me. Supposedly, those health regulations exist to protect my consumers.
Government regulations of business preemptively punish all producers as would-be criminals. They treat all consumers as helpless dolts unable to choose wisely. They grant government bureaucrats unlimited power over our lives. That’s not good, to say the least.
The proper approach is to (1) punish only actual instances of force and fraud in the market, (2) treat adults like the rational creatures they are, (3) limit government power to only protecting individual rights. To do that would require eliminating all government regulation of business — and that’s why I advocate doing so.