It is hard to even imagine how much money America could save as a society if we didn’t waste so much on regulation, and other unproductive costs forced by government. Right from the beginning everything would cost less if we didn’t have one of the highest corporate tax rates in the world–a top rate of 35%, because companies pass off the costs to their customers. We would also have more jobs and productive labor in the US, because fewer companies would see the financial benefits of moving overseas.
The Competitive Enterprise Institute estimates the yearly regulatory costs on the US economy to be around $1.75 trillion dollars: almost 11% of the entire Gross Domestic Product of the US. That means that money is spent on paperwork, lawyers, and complying with regulation, instead of something productive. This also suggests that 11% of the average work day is spent complying with regulation. What if you got out of work at 12:30 every Friday, or what if you only had to work 8-5 Monday through Thursday?
And think about the leaps and bounds that could be made if that money were spent on research and development instead of regulation. Curing disease, inventing new transport, developing alternative fuels, and advancing technology would accelerate, and as a nation we wouldn’t have to work as hard to do it! We would be getting more done for the same cost.
Markets already have built in regulators called consumers. If the government did not force companies to comply with regulations, there would still be just as much or more oversight. Right now we assume the USDA checks up on the meat sold in stores. It is a farce, a charade to make us feel safer.
But what if you knew the government wasn’t going to check into food safety? Maybe you would only buy from local markets where you know the owner. Maybe you would only support businesses that graciously opened their doors to reporters and journalists who sell the information they gather to benefit consumers and help them make better choices about what they buy and who they buy it from.
But the positive effects of eliminating regulation and the costs of regulation would actually snowball. We would all have more time and require less money to buy the same amount of goods and services. Time to grow a garden, clip coupons, start that business, make that product. Money to spend on better quality goods and services, or to contribute to charities, or invest and save.
But even if some of the money you currently earn comes from a company paying you to help them comply with regulations, you may have less money, but more time. And it wouldn’t actually matter that you have less money, because the price of products falls with the decreased costs to the producers. You’re company still has that money though, so they spend it on development which further streamlines production, reducing prices even more. You have less money, but it goes even further than before! And with more time maybe you decide to raise chickens for eggs. This saves even more money.
So you went from working 40 hours a week and getting paid $50,000 per year, to working 36 hours per week and getting paid $45,000 a year–but that $45,000 buys the same amount that $50,000 used to. Why? Because the grocery store went from spending $50 million per year for X amount of groceries, to spending $45 million per year for the same amount. They can’t just pocket the extra money because their competitors lower their prices to better compete, setting off an “arms race” for lower prices until they level out to give the company the same profit margin as before.
The only downside to eliminating all regulation would be if any of that regulation actually keeps us safer, but I have serious doubts that it does. My grandfather paid extra to have seat belts installed in his car decades before they were mandated. Earlier, competition to Ford arose when he wouldn’t paint his cars anything but black.
The market solves problems more efficiently than government regulation, because it only regulates in areas where consumers actually care. Already I prefer to buy from companies that label their products non-GMO even though there is no mandate to label the GMO products. But there is a method to becoming “certified organic”–and it costs money. My sister buys from a CSA that straight out says, “We are organic, but we are not ‘certified’ organic because that would cost us more, and therefore cost you more”.
If enough people care and put their money where their mouth is, the problem will be solved. And if not enough people care, then the costs of “solving” the problem exceed the benefit.
How do we get the economy back on track? Well not wasting 11% of the entire wealth our nation produces yearly would be a good start.