Of Liberty and Breaking the Rules

Sometime in the 1990s, before the days of YouTube, I received a homemade video from a man who owned and operated a small business near Dallas, Texas.  He ran a landscaping company, had a handful of employees, and, according to the video, was in violation of some rule or regulation of the federal government every day.  He did not intend to be in violation.  He did not want to be in violation.  As he explained, it was just impossible to comply with all of the requirements. 

The video began with the owner sitting behind his desk, explaining the problem.  He stood up and took the camera with him as he walked through different parts of his operations, pointing out what was required of him, his business, and his colleagues. 

In the main office he described the employment rules, the tax laws, the related mandates and regulations that applied because he had hired other people.  He walked over to the equipment and described the numberless “safety hazard” regulations, from warning notices that had to be glued beneath the seats of garden tractors, to how he and his workers used, carried, and stored their tools, gear, and machines, and what they were supposed to wear while using them.  He discussed the multitude of formal requirements for managing and applying the fertilizers, pesticides, and other chemicals that are commonly used in his business, including their handling, storage, clean up, and their transportation.  Speaking of transportation, because his company used trucks and other vehicles, there was another long list of rules and regulations that applied to that part of the firm.

Added to all of this, there were numerous reports, applications, notices, and other papers to be filed with a variety of agencies on a regular basis.  When he was through, he sat down again behind his desk and said, “I break the law every day.  I don’t intend to, but I cannot avoid it.  I can’t keep up with it all as long as I stay in business.”

How did we get here?  Is this America?  Is this the land of the free and the home of the brave?  Is this a land of freedom sustained by law?  It is an unknown America, too unknown to most but too familiar to people who run a business, especially the people who own a small company.  The rest of us see little of it, though perhaps we suspect it is there.  Some of us catch glimpses. 

In a large business it takes longer for the regulatory burden to become overwhelming.  For a while the boss can hire more people to help carry the load.  In the large firms of America there is a host of employees who produce no goods or offer any services to any customers.  They spend their careers complying with their slices of these federal rules, laws, and mandates so that some of the other employees can be involved in what the business is all about, providing something to a customer for which the customer is willing to pay. 

The customer may not realize that a large share of what he pays for he never receives; it goes to pay those people who work to keep the business in compliance with the government rules.  More than businessmen would be wealthier without this heavy, dead hand clamped on firms, factories, and farms.  The necessities and luxuries of life would all be a lot cheaper.  Or, another way to say it, we would get more of the goods and services we pay for, less of our money sunk into these hidden costs for unproductive activity. 

America’s Founders sought to create a land of freedom, not dominated by government and the officiousness of government functionaries.  To them “unregulated” was a goal, not a criticism.  They also knew the danger of what could happen, even in America.  James Madison wrote, “It will be of little avail to the people that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood. . .”  (James Madison, Federalist no. 62)

And yet here we are.  What the Texas businessman faced in the 1990s has not become any lighter since.  When was the last time that you read the full text of a law?  Who has read the Obamacare statute, the Dodd-Frank Act, or any of the other voluminous, incoherent laws recently enacted, each written on more than a thousand pages?  For each page of law enacted by Congress today government bureaucrats write ten pages of rules and regulations, all of which are enforced as law though never voted on by anyone who himself has been voted into office by the people.

In the land of the free, whose founding document begins with “We the People”, why do we tolerate it?  One of the complaints against the king of England in the Declaration of Independence reads, “He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people, and eat out their substance.”  And yet we have done the same to ourselves.  The Dodd-Frank Act alone created several New Offices and has already stimulated the hiring of more than a thousand new officers.

“I wear the chain I forged in life,” replied the Ghost.  “I made it link by link, and yard by yard; I girded it on of my own free will, and of my own free will I wore it.  Is its pattern strange to you?”

Scrooge trembled more and more.

“Or would you know,” pursued the Ghost, “the weight and length of the strong coil you bear yourself?  It was full as heavy and as long as this, seven Christmas Eves ago.  You have laboured on it, since.  It is a ponderous chain!”

(Charles Dickens, A Christmas Carol)

There was a time when the chains had to be broken to restore the rule of law.