Chapter dzǹ: Is Ļere a Bias Toward Overregulation? ȂȁȂAny number of government activities might each seem desirable by
itself in the absence of most of the others, but it does not necessarily fol-
low that the whole agglomeration of them is also desirable. To suppose
so would be to commit the fallacy of composition, of supposing that any-
thing true of the part or individual must also be true of the whole or group.
Adding any particular government function to all the others complicates
the tasks of choosing, operating, and supervising those others.ȂĻe more
functions the government takes on and the more complicated they are,
the more they must be left to the “experts”; and the people’s elected repre-
sentatives, let alone the people themselves, are less able to exercise close
and informed control. Ļe elected representatives, who supposedly should
monitor the experts, must largely depend on them for information; and
the experts have their own special views about their work.
Particular government programs, and especially agglomerations of
them, have remote, unforeseen consequences. Ļe current inflation is one
example. Burgeoning programs—including, ironically, ones intended to
help make the citizens economically secure—have led to federal defic-
its, government borrowing, upward pressures on interest rates, Federal
Reserve actions to restrain their rise, consequent excessive expansion of
the monetary base and money supply, price inflation, further allowance
for inflation in interest rates, further short-run efforts to restrain their
rise by monetary expansion, establishment of a momentum in prices and
wages such that an antiinflationary turn in monetary policy would not
bring quick success but would bring a recession, monetary accommoda-
tion of the rising wages and prices, and so on. Ļe result is all theinsecurity
that inflation brings, and all the disruption of economic calculation. A still
more pervasive example—so one might argue—is that the accumulation
of government activities and their repercussions brings a drift in the whole
character of our social, political, and economic system; yet that drift was
never squarely faced and decided on as a political issue.
ŠŔő“LJōţ”ōŚŐ ŠŔő ŏōşő ŒśŞ Řŕř੺
Overregulation stems from a “basic flaw” in our political system closely
related to the flaw noted in current arguments for a constitutional limit
to government taxing or spending.ȃBecause of its close relation to the
ȂSee, in part, FriedmanȀȈȅȁ, p.Ȃȁ. In the technical jargon, government activities have
external diseconomies.
ȃOne presentation of the diagnosis appears in Rickenbacker and UhlerȀȈȆȆ, chap.Ȁ.