BETTER LAWS - CONT'D
In this section the OECD tackles the issue of uncertainty in the future, which they call risk. Trying to protect yourself against unexpected events is wise, but trying to do so through regulation created by politicians is suicidal. As we have seen above, the creation of laws is flawed at its most basic level. If this would not be bad enough, eventually all laws end up having unintended consequences, most of which are far worse than the perceived dangers they are trying to avoid. It's like playing Russian roulette with a fully loaded chamber. You don't need to be a statistician or a mystic to know the future. Given these truths, would you still want politicians to create laws to "protect" you against possible future risks? Thought so.
According to the OECD:
- Governments have always relied on regulation to protect citizens from social, environmental or economic risks.
- …the amelioration of societal risk is such a pervasive activity of government…
- Risk-based approaches to the design of regulation and compliance strategies can improve the welfare of citizens by providing better protection from hazards, more efficient government services and reduced costs for business.
Let's begin by saying that theoretically speaking this is absolutely correct. As we have stated above, laws are pre-emptive in nature. If laws seek to prevent something, then they are protecting us from this something. The problem is, they don't work.
To begin with, as it is impossible to determine which characteristics a law should have in order to be considered "good", it is therefore impossible to determine against what and how should a law protect us. In other words, what you consider "risk" is a non-event for others and vice versa… yet you are subject to all those laws anyways.
Then we have the issue of degree. Even if we assume that somehow through a miraculous process we could determine which risks laws should protect us against, where do we stop? Do we create laws to protect us against crime? Sure. Do we do the same with economic calamities? Why not? How about nature, such as floods and hurricanes? Yes. Or against poverty? OK. How about ignorance? OK. Religions? Yes. Opinions? Sure. UV-rays? Of course! Smoking? Why not? Perfume? Sure. Off-leash pets? Obviously. Bad taste in colours? Certainly. Sexual preferences? Absolutely. Sugar content in orange juice? Sure. Daylight shifts in seasons? Yes. Loud noises? Of course! Light pollution? Undoubtedly. Bad decisions? Most certainly. Crossing streets at mid-blocks? No question. Not voting? Sure. Recycled content in paper? Certainly. Tree trimming?. Absolutely. Hot coffee? Yes. And on and on and on.
All these "risks" have been regulated in one country or another. Some are familiar and some are not. Some may seem reasonable and some ridiculous which is at the center of the problem. Who gets to decide which is which? Where do we stop? How low is a low risk? Who gets to determine this threshold and based on what? As there are no objective measures, these choices are purely subjective and therefore decided exclusively by politicians based on their own interests. Are you happy with this situation?
The reality is that there is hardly any activity, good or service that laws are not "protecting" us against and this is at the core of the problem. To live is to risk. Every action we take every single day, even breathing, is risky. It is for this very same reason that risk is an inexhaustible source of excuses to create laws. There is no end in sight, which translates as job security for politicians. There will always be risks from we "ought to be protected through regulation". And the big question is: Why? Why do we need protecting? The perceived risks and the degree of such risks is strictly a personal and subjective matter. Why are politicians taking this away from us? The one-size-fits-all government protection does not work. Risk protection is always a risk/reward calculation, but they don't let us decide how much we are willing to spend for a given level of protection. And the question again is: Why? It is our money they are spending. They tell us how much money they will take away from us and they tell us what they are going to protect us against and to what level. Are you happy with this?
If all this would not be bad enough, we have the problem of unintended consequences. Every time governments "protect" us against risks, they create a much bigger problem. There are always unintended consequences. For example:
- Unemployment insurance and welfare creates government dependence instead of entrepreneurs.
- Taxation followed by wealth redistribution creates poverty by preventing economic development.
- Socialized medicine creates high prices and inaccessibility while stifling innovation and competition.
- Government-sponsored insurance against weather conditions fosters population increases in risky geographic areas.
These unintended consequences are typically riskier and far more destructive than the risks they are attempting to prevent. This is so much so that in many cases the government itself is the cause of risks. We can go as far as stating that the operation of governments is what creates large artificial risks. Take for example the 2008 economic debacle. This was government-created, pure and simple. Go back in time to the Roman empire and its debasing of gold coins, there is where economic debacles originated. Take all wars - government created. Religious persecution - government supported and sponsored. Political persecution - government created. Unemployment - government created. And so on. Most of the current (and past) debacles have either originated in governments, were government-sponsored or governments where the necessary enablers.
Which leads us to the following question: If governments are the biggest sources of large artificial risks, who is protecting us against them? How do we get governments to create laws against governments creating laws to protect us from risks? Well, we can't. This is so because if we would to try it, this will automatically cancel every single law in the planet because they are all proactive and therefore designed to protect us against risk. The reality is that there is nothing to protect us against our biggest risk which is the government itself. The only thing we can do is to get rid of all governments are retake what is ours, which is the freedom to determine which risks will we accept and which ones will we pay to be protected against. We can be on our way through one simple act: don’t vote.
We also have to comment on the idea that risk-based approaches to create laws leads to better protection against hazards. This is, of course, nonsense as we have shown above. If you take a bad idea and you make it risk-based it is still a bad idea. The process of making it risk-adjusted or risk-oriented does not change the nature of the idea. However, it does provide wonderful job opportunities for bureaucrats.
Then we have the strange link between "government efficiency" and risk-based laws. It would seem that just because a law is risk-oriented it somehow automatically becomes more efficient. This is, of course, nonsense. Laws that are indeed risk-oriented have the tendency to be more complex because they deal with complex issues which originate in risk analysis which are complex themselves. But complex laws require bigger bureaucracies to be implemented and enforced. This makes them inherently less efficient, not more. In other words, the more complex a law is, more of your money will the government spend enforcing it.
Lastly we have the concept that risk-based laws will somehow reduce business costs. This is, again, nonsense. The same previous argument applies. Risk-based laws are complex laws which require the expenditure of more time and resources from business. The problem is not to make laws cheaper; the problem is that all laws are horribly expensive for business while providing almost nothing in return (see for example The High Costs Of Government Benefits). The solution to the problem is to get rid of all laws, not to make them cheaper.
This section of the OECD website links to a large number of processes, procedures, guidance, workshops and recommendations regarding risk-based regulations. The problem is that none of them addresses the issues we have exposed while supporting the idea that such laws are possible and successful. Of course, it could not have been otherwise because the OECD is, after all, a government organization paid in full by politicians. We are neither surprised nor entertained.
Note: please see the Glossary if you are unfamiliar with certain words.