Thursday, May 19, 2005

Column on What's Wrong with Government Regulation

State Regulation is Wrong

Tibor R. Machan

As a professor who teaches business ethics, among other subjects, I have
no illusions about the capacity for?and frequency of?business misconduct.
Like members of any other profession, human beings who embark upon
business are fully capable of malfeasance.

Yet it is quite clear that when people in business misbehave, those bent
on imposing more and more tyranny by government gleefully jump in to use
the fact not so as to instruct us about it, criticize those guilty, and
help us all to cope with it but to advocate more and fiercer government
regulation of the profession itself. To make this evident, all one needs
is consider how malfeasance in certain select professions are dealt with
by the finger wagging classes.

In my region of the world, no less so, sadly, than in many others, we now
are confronted with the misdeeds of many members of the Roman Catholic
clergy, at all levels, from parish priests to the highest authorities. The
misconduct by many of these individuals, involving the shocking abuse of
their position as teachers and counselors, is becoming increasingly
evident. And there is also the widespread effort to cover up the
malpractice, so much so that nearly all parts of the church appear to be

Of course, while many are baffled at this, there is nothing all that
amazing about it. Those in the clergy are no less human than the rest of
us and some of their special circumstances are probably supportive of
their yielding to the temptation to carry on in abominable ways. This, as
we know, is no less so for people in many other professions.

Educators, for example, are notoriously prone to misuse their class room
podiums, so they turn from teachers into indoctrinators. I have been in
the field for nearly forty years now and have ample direct evidence of
colleagues who make no bones about advocating to their students their
particular ideology, treating their students as a captive audience for
proselytizing to them about what is dear to their hearts instead of taking
seriously their oath of office, which is to teach them about ideas and
facts and controversies without taking sides in the process.

Coaches, doctors, columnists, journalists, lawyers, engineers, nurses,
hairdressers and the lot, they all have their various opportunities to
become corrupted and many of them yield to the temptation to do so?to take
short cuts, to dodge their responsibilities, to misbehave in various ways.

Those, however, who want to strengthen the power of the government to
meddle in our economic lives are very good at ignoring that members of the
professions that are constitutionally protected from government
intervention are just as prone to malpractice, if not more so, as are
those in the field of business. The First Amendment to the US Constitution
prohibits government intervention in the professions of journalism and the
clergy and the ban on prior restraint applies there fully, so only after a
crime is suspected may intervention commence. And the principle of
academic freedom protects most teachers from interference not only from
government but even their own administrators, so only in the grossest
instances of professional misconduct will educators be reprimanded?and
that is exactly how it should be. The rest must be left to peer pressure
and other informal remedies.

But not with business. If executives in a few companies engage in
malpractice, there is guaranteed to be a chorus of calls for massive
increase in federal, state, or local government regulation of the entire
industry. Just imagine if this were done vis-à-vis Newsweek?s recent
misconduct, or Dan Rather?s or that of all the priests in the Roman
Catholic church? Yet, of course, it is clearly understood that no such
government action may be taken because?.well, why, exactly? Why are these
professions made immune by law to prior restraint but not those in
business? Are people in business any less human, any less deserving of due

No. Sadly our legal system is replete with certain prejudices about
business and other practical professions, age old ones that permit some
people to meddle in the professional affairs of others even if the only
excuse is that certain other people have done bad things in those
professions. That is, in principle, like starting to regulate all
journalists because of how Newsweek?s reporters or Dan Rather behaved. Or
putting all Roman Catholic priest under government supervision because of
the malpractice of some of them.

The fundamental thing wrong with government regulation of any profession,
including business, is that it commits the logical fallacy of
composition?treating all members of a group as if they automatically
followed the bad behavior of some of them.

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