Federal Regulations Have Made You 75 Percent Poorer

U.S. GDP is just $16 trillion instead of $54 trillion

The growth of federal regulations over the past six decades has cut U.S. economic growth by an average of 2 percentage points per year, according to a new study in the Journal of Economic Growth. As a result, the average American household receives about $277,000 less annually than it would have gotten in the absence of six decades of accumulated regulations—a median household income of $330,000 instead of the $53,000 we get now.

The researchers, economists John Dawson of Appalachian State University and John Seater of North Carolina State, constructed an index of federal regulations by tracking the growth in the number of pages in the Code of Federal Regulations since 1949. The number of pages, they note, has increased six-fold from 19,335 in 1949 to 134,261 in 2005. (As of 2011, the number of pages had risen to 169,301.) They devise a pretty standard endogenous growth theory model and then insert their regulatory burden index to calculate how federal regulations have affected economic growth. (Sometimes deregulation extends rather than shortens the number of pages in the register; they adjust their figures to take this into account.)

Annual output in 2005, they conclude, "is 28 percent of what it would have been had regulation remained at its 1949 level." The proliferation of federal regulations especially affects the rate of improvement in total factor productivity, a measure of technological dynamism and increasing efficiency. Regulations also affect the allocation of labor and capital—by, say, raising the costs of new hires or encouraging investment in favored technologies. Overall, they calculate, if regulation had remained at the same level as in 1949, current GDP would have been $53.9 trillion instead of $15.1 in 2011. In other words, current U.S. GDP in 2011 was $38.8 trillion less than it might have been.

Let's use those results as the starting point for some rough calculations. The Bureau of Economic Affairs estimates that real GDP in 1947 was $1.8 trillion in 2005 dollars. The real GDP growth rate between 1949 and 2011 averaged 3.2 percent per year. Compounded over the period, that would yield a total real GDP of about $13.3 trillion in 2011; that's the same figure the bureau gives for that year. If regulation had remained fixed at 1949 levels, GDP growth would have averaged 2 percent higher annually, yielding a rate of about 5.2 percent over the period between 1949 and 2011. Compounded, that yields a total GDP in 2005 dollars of approximately $43 trillion, or $49 trillion in 2011 dollars, which is in the same ballpark as the $53.9 trillion figure calculated by Dawson and Seater.

But let’s say that the two economists have grossly overestimated how fast the economy could have grown in the absence of proliferating regulations. So instead let’s take the real average GDP growth rate between 1870 and 1900, before the Progressives jumpstarted the regulatory state. Economic growth in the last decades of the 19th century averaged 4.5 percent per year. Compounding that growth rate from the real 1949 GDP of $1.8 trillion to now would have yielded a total GDP in 2013 of around $31 trillion. Considerably lower than the $54 trillion estimated by Dawson and Seater, but nevertheless about double the size of our current GDP.

All this means that the opportunity costs of regulation—that is, the benefits that could have been gained if an alternative course of action had been pursued—are much higher than the costs of compliance. For example, the Competitive Enterprise Institute's report Ten Thousand Commandments 2013 estimates that it costs consumers and businesses approximately $1.8 trillion—about 11 percent of current GDP—to comply with current federal regulations. That's bad enough, but it pales in comparison to the loss of tens of trillions in overall wealth calculated by Dawson and Seater.

Defenders of regulation will argue that regulations also provide benefits to Americans: lower levels of air pollution, higher minimum wages, and so forth. But the measure devised by Dawson and Seater accounts for both the aggregate benefits and the costs of the regulations. The two researchers note their results "indicate that whatever positive effects regulation may have on measured output are outweighed by negative effects." There may be some unmeasured positive outputs that result from regulation. But the benefits would have to be hugely substantial to offset the loss of $39 trillion in output in 2011 alone. Is that plausible?

Dawson and Seater explicitly do not attempt to separately measure the benefits of regulation in their study, only its overall effects on output. But the Office of Management and Budget does claim to measure the costs and benefits of federal regulation. In the most recent Office of Information and Regulatory Affairs (OIRA) report, the highest estimates for costs and benefits for regulations adopted from 2002 to 2012 are $84 billion and $800 billion respectively. Let's be extremely generous in calculating regulation's benefits and assume that they provide not just $800 billion in total benefits over 10 years, but that much in just one year. Then, just to be sure that we haven't overlooked any non-monetized benefits unaccounted for the OIRA, and to take into account of the fact that number of pages in the CFR have risen six-fold, let's multiply that by 6, yielding an estimated annual regulatory benefit of $4.8 trillion.

That's just a bit more than a quarter of the current GDP. Recall that Dawson and Seater have calculated that if the regulatory burden had remained the same as it was in 1949, the U.S. economy would be about $38 trillion bigger than it currently is. So the upshot of this wildly optimistic set of assumptions regarding the benefits of regulation is that Americans have foregone $33 trillion in income that we otherwise would have had. Or in the alternative case, where a lower rate of growth results in a GDP of only $31 trillion, that would mean that Americans have foregone about $10 trillion in income due to overregulation.

Whatever the benefits of regulation, an average household income of $330,000 per year would buy a lot in the way of health care, schooling, art, housing, environmental protection, and other amenities.

Since GDP growth rates in other industrialized countries more or less track U.S. growth rates over the period, I asked both Dawson and Seater via email if it would be fair to conclude that those countries had also adopted a similar suite of regulations that also slowed their potential GDP gains. Being careful not to go beyond the data in the study, Dawson replied, "Similarity of growth rates really doesn't tell us anything about the growth effects of regulations in the different countries. However, it would be fair to say that many studies (cited in our paper) examine the effects of regulation in many European countries and find large negative effects on employment, investment, rates of new business start-up, and so on."

For example, a 2004 World Bank study of the effects of regulation in a large sample of industrial and developing countries constructed an index of severity of regulation. It revealed that increasing a country's index of regulation by one standard deviation (34 percent) reduces its per capita GDP growth by 0.4 percent. Dawson and Seater's article, in comparison, finds that "an increase in total regulation of 600 percent reduces growth by just 2 percentage points. Relatively speaking, our effect is smaller." With appropriate caveats about differences in various studies, Seater told me via email, "The uniform message that comes through from all the studies I have seen is that regulation has strong negative effects on economic growth."

So if the effects of regulation are so deleterious to economic growth and the prosperity of citizens, why do countries enact so much of it? Dawson and Seater's paper mentions three theories: Arthur Pigou's notion that governments enact regulations to improve social welfare by correcting market failures, George Stigler's more cynical view that industries capture regulatory agencies in order exclude competitors and increase their profits, and Fred McChesney's argument that regulations are chiefly aimed at benefiting politicians and regulators. I asked if their results fit most closely with McChesney's. Dawson replied: "This could be the conclusion that one reaches based on our empirical results (since they show a net cost of regulation over time), but again we did not set out to prove or disprove any particular theory." Seater added that their research does not address the question of "why society allows excessive regulation....It's an important [issue], but it is one for the public choice people to study, not for macroeconomists like me and my coauthor."

One such public choice theorist, Mancur Olson, argued in The Rise and Decline of Nations (1982) that economic stagnation and even decline set in when powerful special-interest lobbies—crony capitalists if you will—capture a country's regulatory system and use it to block competitors, making the economy ever less efficient. The growing burden of regulation could some day turn economic growth negative, but in a note Dawson and Seater suggest that in the long run that will "not be tolerated by society." Let's hope that they are right.

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  • ||

    I don't think we're capable of understanding the amount of wealth wasted and destroyed by government in general. It's so much that our brains can't process it, much like trying to comprehend how big a galaxy is or how stupid Michael Bay movies are. It's just beyond any scale we are used to.

  • Pro Libertate||

    Note that the Culture didn't start on Earth.

  • Fist of Etiquette||

    Imagine a world where the economy were allowed to spill the banks of regulation. At first, people enjoy seeing their paycheck to grow by a factor of six. But then out of nowhere a sinister backlash, as it happens at the expense of orphaned children. Limbless workers wandering a barren, treeless wasteland of toxic pollution and unbridled economic growth.

    One man leads a team to stand against the oncoming meteor of industry. Bruce Willis IS Harry Stamper.

  • ||

    Iain Banks is dead, ProL. Too soon.

    Government is a literal parasite. And the amount of blood it sucks from us at this point is so vast that the only reason we're not dead or killing the parasite is that we've grown so prosperous that we can tolerate it. But I don't think people understand how much more they would have without the parasite sucking up vast portions of their wealth. They think it would be, like, 10 or 15 percent more. But if this article is correct, it would be like 300-600% more.

    People might fight for that.

  • Pro Libertate||

    Yeah, but too many think this massive, insanely expensive government is necessary.

  • ||

    The best parasites convince you they're necessary. It's symbiosis, they claim. What exactly are we getting here for our 300K?

  • Hugh Akston||

    The satisfaction of knowing that brutal Syrian rebels are well armed.

  • ||

    I don't know about you, but I'm satisfied!

  • Free Society||

    Taxes and regulation are absolutely necessary, because without them who would fill the potholes? Libertarianism has just been defeated. BOOM

  • R||

    The same people who fill them where I live...NO ONE! Actually, we understand there is a need for regulation (and yes even a LIMITED) amount of taxation. Our problem is there is an excess of both (or more specifically the imposition of both outside the powers of The Constitution). And technically, the maintenance of post roads is a responsibility of the Congress.

  • netterku||

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  • sarcasmic||

    For one thing the comfort in knowing that no one is engaging in economic activity without asking permission and taking orders. Without government idiots telling the experts how to do their work, they might run amok! Who knows what they might come up with if they didn't have to ask permission whenever they want to try something new! It would be chaos! Anarchy! Cats sleeping with dogs!

  • LTC(ret) John||

    ROADZ!

  • Pro Libertate||

    $300K per year. That's a shitload of money I don't have.

  • fried wylie||

    I could have my 55MW self-contained RTG power plant in just a few years of saving.

    /sadpanda

  • perlhaqr||

    Lots of federal police keeping us from having a clean supply of drugs, and from having firearms that are a half inch too short?

  • Free Society||

    Well if you put a shotgun shell in something that looks like a pistol, it's not considered a sawed-off shotgun. But if you have a considerably harder to conceal sawed-off shotgun, you're a felon. merica!

  • John C. Randolph||

    I'm curious: what exactly is the advantage of a short-barrelled shotgun? Why do people want them, and why does the government not want to allow them?

    -jcr

  • perlhaqr||

    Advantage: Maneuverability.

    Gov't Dislike: Concealability. (I presume.)

  • Kyfho Myoba||

    Banks is dead?! Fuck.

  • SQRLSY One||

    Epi, you are a sad specimen of a supposedly humanoid unit… Did you not realize that Government Almighty literally and truly LOVES you? FAR more than you can ever know? Parasites, you say??! Parasites, even parasites upon the top of parasites, are a time-honored TOP OF THE PYRAMIND for thousands and thousands of years, as we Scienfoologists like to say! “P” may stand for Parasites, or Politicians, or Power Pigs, it all REALLY does not matter much at all… All that matters is that we worship the “P” at the “Peak” of the “Pyramind”… To fully understand the Pearls of Wisdom of what I so casually cast to yuns swine, please peruse http://www.churchofsqrls.com/

  • Hugh Akston||

    Epi would just blow his $277k on Blu-ray copies of Willow.

  • Pro Libertate||

    That's not quite correct. He's blow it funding a fan-created version of it, with him playing Willow.

  • Pro Libertate||

    He'd.

  • Hugh Akston||

    I don't remember Willow making out with Val Kilmer.

  • Pro Libertate||

    Yeah, well, you know how fan fiction goes.

  • ||

    It happened!

  • ||

    Calm down, Hitler. Do you think Ron Howard just wished Willow was great? No...and yet it was.

  • Rufus J. Firefly||

    Oh in Canada we've learned to rationalize by saying everyone is safe and covered! Behold mediocrity in all its fair and just splendor!

    /bows. Walks backwards. Falls off stage.

  • Rufus J. Firefly||

    Rationalize leaving money on the table that is.

  • mtrueman||

    You don't seem to be capable of understanding the idiocy of two academics counting the pages of a book and calling it research. You read this correctly; not reading the book but counting its pages. A couple of highschool students doing this might deserve a pat on the back, but here at Reason this self styled journalist "Ronald Bailey" who's managing with every passing week to convince me that he's just as big a fraud as Reason's junk food shill, breathlessly passes on this pitifully weak scholarship without even a pretense at getting a second opinion, standard practice for any decent journalist and even most indecent ones.

  • Ron Bailey||

    m: RTFA

  • gaoxiaen||

    Not everyone has a couple of dozen lifetimes to wade through all that shit. Lawyers can't even keep up with their specialties. Hell, Congress often can't possibly read the bills that they vote on.

  • Pro Libertate||

    Well, I must say that I am strongly opposed to me being nearly $300K poorer each year.

  • Auric Demonocles||

    Think of how many suborbital flights we could afford to buy.

  • Pro Libertate||

    Indeed.

    I just read something that suggested SpaceX might go public.

  • Brett L||

    I've heard its a five to ten year timeline due to the market emphasis on being consistently profitable in the short-term, even when being below that line isn't the longest term goal. But then again, Amazon.com went public in '97 and didn't show a profit until 2001.

  • Brett L||

    Trying again in English.

    due to the market emphasis on being consistently profitable in the short-term, even when being below that line isn't the longest term goal carrying shrinking losses on growing income may be a better growth strategy in certain markets

  • Pro Libertate||

    Yeah, the timing is an issue, but from SpaceX's perspective, they could use the capital. Relying on the government as a client is very dangerous, and they won;t be free of that for some time.

  • Auric Demonocles||

    I might throw a few bucks at that.

  • Auric Demonocles||

    Hmmm, if I'm allowed to.

    I literally just found out from a coworker (as in since my 2:30 post), that they are considering becoming a customer.

  • Pro Libertate||

    Oops. You might be able to get some in a general defense/space fund, I guess.

  • Brett L||

    How dare you bet on your own work and the work of your customers!

  • Agammamon||

    But CORPORATIONS! If it wasn't for our benevolent overlords selling favors then the corporations would be selling your children's organs! What good is $300,000 if you have no kidneys?

  • Pro Libertate||

    I could buy kidneys with that kind of money.

  • Agammamon||

    There wouldn't be any kidneys to buy! The SPECULATORS would be all speculating and drive the price of kidneys sky high!

  • Pro Libertate||

    Don't be silly. I'd just pay my servants for theirs.

  • LTC(ret) John||

    You pay your servants?!

  • Pro Libertate||

    This is all hypothetical, because my great wealth has been diminished by the government.

  • Loki||

    The SPECULATORS would be all speculating and drive the price of kidneys sky high!

    Not to mention the corporations sit there in their... in their corporation buildings, and... and, and see, they're all corporation-y... and they make money.

  • Free Society||

    And you haven't even mentioned the children. Oh think of the children!

  • Fist of Etiquette||

    Okay, once again I have to remind everyone that some of us are already down a kidney, so these are worse than rape jokes to us.

  • Pro Libertate||

    You wouldn't be down anything if you had the extra $300K/year you don't have.

  • ||

    Maybe you shouldn't have let that Brazilian tranny hooker drug you with rohypnol and leave you in a bathtub filled with ice.

  • Fist of Etiquette||

    Maybe you shouldn't comment on other people's lifestyle choices.

  • ||

    Maybe you shouldn't take plastic surgery vacations to Rio that are thinly veiled covers for a hermaphrodite prostitute tour. FoE likes the pole and the hole.

  • Fist of Etiquette||

    I WAS BORN THIS WAY.

    (The kidney thing not the other thing.)

  • LTC(ret) John||

    So you learned the "other thing"?

  • Fist of Etiquette||

    I'll never forget what he said to me.

  • robc||

    Trevor Rabin was born with something like 8 spleens. Maybe you can borrow one from him.

    A spleen is just a fancy kidney, right?

  • RannedPall||

    Hey! Brazilians are protesting in large numbers (surprised I haven't found anything on reason yet) about their government spending billions of public munniez on building stadiums for the World Cup. Kind of ironic considering their president was a socialist militant back in the day, and is still a member of the socialist party.

  • LTC(ret) John||

  • RannedPall||

    Never said reason had nothing on it,, just said I hadn't found anything, and the bit about the president endorsing the protests is... interesting.

  • LTC(ret) John||

    "surprised I haven't found anything on reason yet" insinuates that reason has nothing on it. Not so much that you are surprised you could not look as far back as the AM links of today.

  • RannedPall||

    I'm new to reason and traverse through their website on the mobile format of their site, which is not as easily navigable as their normal format, so excuse the hell out of me if I didn't do a thorough search of reason for an article. I didn't realize retirees were so easily agitated...

  • Brett L||

    Get off our lawn! And welcome.

  • RannedPall||

    Yes sir Mr. Kowalski!

  • ||

    Don't sweat Col J. He's cranky today.

    Welcome to Reason.

  • ||

    I made this argument to my father recently based on my own speculation. In my imaginings the discrepency was not 330,000 bucks though. Jesus.

    He said he remembered reading an argument for why the economy needs a black hole to throw money into but he could not remember what it is. I am going to ask him again and see if he can remember where he read it.

    Let me take a stab.

    If people were able to keep all of the wealth that they create then power would also be greatly dispersed. Government power would be a small fraction of what it is now. Cant have that, so seize as much wealth from people as possible.

  • Lord Humungus||

    don't diss the money hole!

  • DaveAnthony||

    Oh I love the money fires!

  • sarcasmic||

    When I hear progressives bleat about "corporate power" I want to hit them up side the head!

    Corporations rely upon customers voluntarily purchasing goods and services of their own free will. Freaking libtards just don't understand that. They think corporations get rich by forcing people to buy their products. I don't get it. I mean, I just don't get it.
    Why is it so difficult to understand that voluntary exchange makes everyone richer while coerced redistribution makes everyone poorer?
    It just boggles my mind. I suppose it has to do in part with not understanding that wealth is not money and money is not wealth, but still. It's not a difficult concept.

  • Dr. Frankenstein||

    I think it's more the labor theory of value. The leftists think that we would all be nothing but penniless serfs living in a poisioned wasteland if the corporations weren't regulated. But your larger point still stands.

  • Certified Public Asskicker||

    I was going to post this Huffpo comment from a morning link, but I was late in reading this morning.

    It works here too. Behold the stupid:

    There are two types of oppression. Oppression by a government and oppression by corporation.
    Regulations were enacted as a check, by The People, through Their government, against the authoritarian tendencies of business.
    There isn't one law protecting me from unscrupulous business that I want to see taken off the books, we have, in fact, a VERY long way to go.

  • sarcasmic||

    Obviously a product of the public schools.

    "Government is us and The Corporations are them! It's us against The Corporations! They just want profits! That's all they care about! It's up to The Government to take those profits away and give them back to The People to whom they belong! Profit is theft, and taxation is justice!"

    I know. I once felt that way. Now I think.

  • RannedPall||

    "a VERY long way to go." That scares me.

  • ||

    There isn't one law protecting me from unscrupulous business that I want to see taken off the books, we have, in fact, a VERY long way to go.

    I wonder how broad the term "unscrupulous" is being used here.

    And, leave it to a progressive to use language draped in silly, moralism. It's like they're part of a religion, which makes them stupid.

  • sarcasmic||

    I wonder how broad the term "unscrupulous" is being used here.

    I'm pretty sure that "unscrupulous" means "turning a profit" because, as we all know, profit is theft.

  • ||

    Sarcasmic, one word: envy.

  • Free Society||

    Even if corporations were the greedy baby eating monsters the left believes them to be, corporate charters and all the privileges that come with it are given by government. Their argument holds no water under any circumstances.

  • fried wylie||

    He said he remembered reading an argument for why the economy needs a black hole to throw money into but he could not remember what it is.

    1. lol at old people remembering things they don't remember.

    2. maybe the thought got sucked into the Economic Black Hole.

  • Acosmist||

    You can remember the existence of a thing the details of which you don't remember.

    You can know a thing you don't know (I sure don't know Galois theory).

  • fried wylie||

    then power would also be greatly dispersed

    As free people, this is exactly the situation we want.

    Consolidated power leads to shit like genocide.

  • RannedPall||

    All these responses are proof that you peons, er, I mean, citizens, wouldn't be spending your money wisely, therefore, it is better that the State have it. Now back to work.

  • BakedPenguin||

    Honestly, this doesn't surprise me. The massive productivity gains from the Internet and other near-instant communications have all been Hoovered off by the larded government.

  • OldMexican||

    Annual output in 2005, they conclude, "is 28 percent of what it would have been had regulation remained at its 1949 level."


    It's like finding out that choking a victim allows much less air into her lungs than what would be possible if the hands remained in the previously open position. Such a surprise.

  • fried wylie||

    *awards Old Mexican with the Nobel Prize for Physics*

  • sarcasmic||

    I knew the cost of not allowing people to engage in economic activity without asking permission and taking orders was high, but that's fucking ridiculous.

  • Fist of Etiquette||

    Do you know what would happen if voluntary economic transactions were allowed to happen unmolested? Neither do I. And I don't want to know.

  • RannedPall||

    You'd most likely end up a slave to the evil corporations of course!! Now do you want this GM logo branded on your right or left ass cheek?

  • Metazoan||

    Sometimes I think progtards love regulations and bureaucrats for their own sake- no results needed. So what if we could have been immeasurably richer? What about our beloved TOP. MEN. and their gospel of regulations?!

  • KDN||

    Sometimes I think progtards love regulations and bureaucrats for their own sake- no results needed.

    This is what I think actually goes on. During the PPACA debate way back when, I constantly asked by leftist friends if they ever even bother to do any sort of cost/benefit analysis, even a quick one, before adhering to a position. The answer was uniformly no. They feel like bureaucrats and regulations will help, therefore they must.

  • fried wylie||

    They feel like bureaucrats and regulations will help

    I feel the opposite. I am therefore being othered by the resulting policies of the leftist agenda and demand recognition of my feelings on the matter.

  • Free Society||

    Sometimes I think progtards love regulations and bureaucrats for their own sake- no results needed.

    Intentions are what count. Results are not relevant to their goal of paving that road to hell.

  • rts||

    One problem is that when people hear "government regulations", they seem to think it just means things like "cars should have seat belts", not realizing that the regulations dictate every little facet of being for a seat belt, right down to the colour-fastness of the material used in straps.

    More people need to see this.

  • fried wylie||

    Those commercials, "cops are trained to spot seatbelt violations, even at night", make me want to strangle someone with a seatbelt.

  • fried wylie||

    to elaborate:

    1. I don't accept the justification for seatbelt laws in the 1st place.

    2. that training sounds like money well spent....

    3. how much money is the gov't wasting on fucking commercials?!

  • Free Society||

    make that someone a cop, legislator or an otherwise sociopath of the "common good"

  • ||

    I did not RTFS, but it's impossible to calculate the regulatory savings...i.e. the wealth saved by events which did not occur due to regulatory constraints. Am I arguing in favor of a regulatory state? Not even remotely. I just hate studies which purport these type of what-if scenarios over ridiculous periods like 60 years.

  • fried wylie||

    Hey, it works for creating regulations (think Climate Change), so why not fight fire with fire?

  • Homple||

    Don't worry, a carbon tax will help you get back what you've been missing.

  • Bill Dalasio||

    So the median household income would be $330,000. Damn, in libertopia, everyone can afford a top hat and a monocle.

  • Gorilla tactics||

    yeah..it is one hell of "seen vs unseen" problem isn't it? I'm certain there are analogous scenarios in the fields of science and medicine. We prolly could have wiped out so many more diseases without the FDA slowing down all these drugs. So we would live longer with 300k a year on top of that.

  • ||

    Oh no, my friend, monocles will be priced as to ensure the peons are kept out of the market. Just think of the social chaos should the underlings be adorned with single piece eyewear.

  • sarcasmic||

    Thing about regulators is that they're people with families to support just like anyone else, and like anyone else they want to keep their jobs. If they don't keep writing more and more regulation, what's the justification for keeping them employed? There is none. So they write and write and write. They never ask if what they are writing is good for society, and they don't care. They only care about keeping the paychecks rolling in because they want to send their kids to college just like anyone else.

  • Anvil||

    Based on your description, it sounds just like a Ponzi scheme

  • ||

    Somewhere in my cold, Somalia-loving heart is the senses of a bleeding heart progressive. Sure I think about how nice all that extra loot would be, but I also think with an economy that robust how much humanitarian good could we have done for the world with that kind of productivity? The implications beyond America are seemingly infinite. The philanthropy industry would be a ENORMOUSLY successful.

    This is actually the most displeasing article I've ever read here, to be honest. So much opportunity for world betterment was passed up for narcissists to get power and make promises to do exactly what was forgone. Its pretty deflating and rage inducing all at once.

  • rts||

    Some people argue we'd be 400 years more advanced if not for the Dark Ages and religion's grip on scientific thought.

    Many of those same people, though, just can't see how we'd probably be at least 100 years more advanced if not for the strangulating effect of government, same as religion in the Dark Ages*.

    [*] and that's kind of debatable, anyways.

  • Auric Demonocles||

    Didn't the black plague have the blame for a decent chunk of those years?

  • Acosmist||

    The Greeks had centuries before Christianity to work out the implications of Atomism. Didn't get them anywhere. The idea that religion destroyed science is a bit of Enlightenment propaganda.

  • gaoxiaen||

    True. Burning a thousand plus years of knowledge would have no effect. All we really need is one book.

  • Loki||

    Arthur Pigou's notion that governments enact regulations to improve social welfare by correcting market failures, ...

    ^The stated intentions of the progderps

    George Stigler's more cynical view that industries capture regulatory agencies in order exclude competitors and increase their profits, ...

    ^The actual results

    and Fred McChesney's argument that regulations are chiefly aimed at benefiting politicians and regulators.

    ^The real motivation of the assholes who comprise the political class and government.

  • JW||

    As a result, the average American household receives about $277,000 less annually than it would have gotten in the absence of six decades of accumulated regulations—a median household income of $330,000 instead of the $53,000 we get now.

    The rich would get richer and we can't have that now, can we?

    Better the whole world go blind than let one man see with perfect vision.

  • sarcasmic||

    Do you realize that if you brew beer for sale, that your labels require government approval? That's right. You come up with a new recipe and label, and it might take as long as six month before some government retard gives you an answer as to whether or not they approve of your label. If they don't, well then it will be another six months before they respond about the corrected label. If the name of the brew contains "Tea Party" or "Patriot" it could take years before your label is finally approved.

  • Auric Demonocles||

    Well people in the Tea Party are known to hate government regulations, so it only makes sense to review their applications more thoroughly. You've got to spend your meager, sequester-destroyed resources on the ones who are most likely trying to skirt the law.

  • John Galt||

    That's interesting. My friends have been pushing me to go commercial with my home brews for at least the last twenty years. There's far easier ways to make buck than diving head first into a regulatory nightmare like manufacturing alcohol for sale.

  • sarcasmic||

    I once looked into what it would take to legally sell my homebrew, and there's no way I would even consider it.

  • Loki||

    But would you consider illegally selling it?

    How much economic activity takes place on black and gray markets do to government regulation driving the activity underground? I'm gonna go with "a shitload."

  • ||

    It's easy to want to say FU to the government. But the threat of heavily armed ATF shitheads storming your house and trashing it and shooting your dog and scaring the fuck out of your kids is simply a threat you have to take seriously, and usually then it's not worth it to do something that you'd probably have to do at a loss anyhow, because the costs of homebrew are so high.

  • sarcasmic||

    because the costs of homebrew are so high.

    Really? I make five gallons (approximately two and a half cases) for around twenty dollars worth of ingredients. Factor in the labor and yeah it's expensive, but I ignore my labor costs.

  • robc||

    For homebrew, I ignore my labor costs because I enjoy making beer, so that actually provides me benefit in excess of the theoretical labor costs.

    Win-win.

  • John Galt||

    My dog died of old age. Nonetheless, the ATF shitheads storming into my relatively peaceful life make selling black market brew out of the question.

  • Free Society||

    Give them some cute animal to shoot or they may dig up your backyard looking for Sparky.

  • sarcasmic||

    There wouldn't be much of a point in selling it unless I could sell it to local pubs and restaurants. Just selling it to my neighbors is dumb, wouldn't be profitable, and risks word getting out which risks getting busted.

    Short answer: no.

  • John Galt||

    A fellow brewer, right on.

  • Auric Demonocles||

    You haven't been on any beer threads, have you?

  • robc||

    Thats what I was thinking.

  • perlhaqr||

    You'd be happier slowly lowering yourself feet first into a wood chipper.

  • robc||

    Do you realize that if you brew beer for sale, that your labels require government approval?

    They just changed this so they no longer require approval for beer sold entirely intrastate. Which is nice.

    You come up with a new recipe and label, and it might take as long as six month before some government retard gives you an answer as to whether or not they approve of your label.

    It isnt close to that long, but it is a pain in the ass.

  • robc||

    As fed bureaucrats go, the TTB is reasonably efficient (which means they only moderately suck). They have been simplifying things the last few years as they have more and more breweries to deal with. All the really care about is collecting the excise tax.

  • gaoxiaen||

    When I was in Somalia, the labels were mimeographed.

  • sarcasmic||

    Think about what it would take to turn your favorite hobby into a legal business. There's a lot of opportunity cost right there. It's off the charts. So yeah, the numbers don't surprise me one bit.

  • ||

    It really depends. It's not always that hard. My spouse likes to do stained glass. To sell it at craft fairs or even a storefront is not a big deal, even with OSHA/IRS/EPA/whatever regulations.

    But the labor and material costs are WAY too high to consider it. That's the real barrier to entry to most businesses. It's simply not viable.

    But YMMV. If you try to setup a cupcake shop, that could be regulatory prohibitive. It really just depends on the line of business.

  • MasterDarque||

    Why cant you people just understand that government is here to help. Brb the Easter Bunny is at my door

  • John Galt||

    When the government tells you it's "here to help," be afraid. Very afraid.

  • ||

    I once dreamed of manufacturing ammunition. There was a fellow in Stonewall who did so. He had a lead foundry and made pistol bullets. I drove up to ask him about it. When I got there I discovered he had closed up shop. Too many government regulations he said, especially concerning the handling of lead.

    I put the idea out of my head.

  • John Galt||

    Ammunition manufacture is heavily regulated on a variety of levels. Which is quite possibly why both of the ammunition manufacturers within a hundred miles of where I'm located both closed up shop within the last decade.

  • Fatty Bolger||

    Well it's OK, because it's not like we could ever have an ammunition shortage or anything.

  • perlhaqr||

    This squares pretty well with what I've been saying for the last 12 years or so: This entire "economic slowdown" we've been having would disappear almost instantly if the government would just get the fuck out of the way.

  • DJK||

    Not a single Tony comment to tear apart? Hmm...I'm somewhat disappointed. Boss is being a dick - needed someone to take the anger out on.

  • OldMexican||

    Re: DJK,

    Not a single Tony comment to tear apart? Hmm...I'm somewhat disappointed.


    He's probably still jerking off on the thought that the legendary fertility rate of us Hispanics will come riding to rescue the spendthrift party. Give him some time to compose himself.

  • CRL1981||

    This sounds bad, but at the same time I look at prices now and ask what prices would be if the median household income were $330k per year. I don't really see where if at all that this article takes that into account. Pretty much I am saying maybe there is some good effect here on that score. Maybe accidental but I would be interested to see what the effects of inflation would have done here.

  • Mickey Rat||

    Is John writing spambot copy now?

  • gaoxiaen||

    Quit using my name, asshole.

  • SQRLSY One||

    Y’all am ignernt… Dint y’all NOOO that Gumint Almitey LUVS U?!?! Luvs U sew much that It has to preteck yew from un-edumacated, ignert nose-blowing (research the “earpopper” and prescriptions) and throat-clearing, AKA “coughing” (research “lung flute” and prescriptions). All them thar reguulatishuns R meant to PRETECKT U, now get ‘er straight! These kinds of excellent non-IGNERNT solutions are brought to you by the Church of Scienfoology… To learn more, see http://www.churchofsqrls.com/

  • BLEEDINELL||

    Well, fuck me hard in the prison yard.
    File story under "things that are obvious and don't need discussion".

  • ||

    As I am an economist myself I have to say well... no. Not 75%. 20%? Sure. But not 75%. If that were so a place like Hong Kong (all but unregulated) would be much, much richer than the US(per capita), rather than about on par.

  • Slothrop||

    Yeah, this might be the dumbest excuse for "science" I've seen all day.

    Basically, they demonstrated that their conclusions are valid IF you assume the only thing that can possibly influence GDP growth is the number of pages in the federal code.

    Congratulations on being able to do algebra. Too bad that's an absurdly dumb assumption to make.

    I don't care if it's libertarian junk science. It's still junk science.

    Is it just me or has the quality of writing in this magazine/website gone dramatically down in the last 2-3 years?

    Maybe next time apply some, IDK, "reason" to the subject of the article instead of just writing a puff piece which informs us whether the people you're writing about are libertarians or not?

  • MoreFreedom||

    What's wrong with correlating federal regulations to GDP growth? Of course correlation doesn't always equal causation, but it seems clear to me that regulations prohibiting win/win commercial transactions that would otherwise occur, does reduce our prosperity. That's not junk science, and is a fact known by economists.

    E.G., the minimum wage prohibits me from hiring people and paying them less. By prohibiting this, both I and those I'd hire lose opportunities to improve our living conditions. Economists are almost all in agreement with this.

  • MoreFreedom||

    "Dawson and Seater's paper mentions three theories: Arthur Pigou's notion that governments enact regulations to improve social welfare by correcting market failures, George Stigler's more cynical view that industries capture regulatory agencies in order exclude competitors and increase their profits, and Fred McChesney's argument that regulations are chiefly aimed at benefiting politicians and regulators."

    I'd say that politicians sell "regulations" as improving social welfare, but are really selling government favors for campaign cash, with those favors including regulators that essentially protect certain businesses from competition and the market.

    It fits right in with the theory that government has expanded by confiscating the vast majority of the benefits of the improvements in our productivity over time, but leaving citizens slightly better off (rather than a lot better off) so they don't complain about the increased government burden. Thus, government spending as a % of GDP has increased from about 8% in 1900 to about 42% today (not including the cost of complying with laws and regulations).

    Government leeches will suck all the blood it can from productive citizens (the leeches' host) even risking the death of the host, and the end of their blood sucking. After all according to Obama, "the rich aren't paying their fair share."

  • Pulseguy||

    A big name in the International Enviro movement is a friend of mine. He looked at purchasing a couple of lots I own on the water on an Island. It is a green haven, in an area with the first elected Green Party member in North America as its representative. My big shot friend and his buddy spent the entire time viewing my property discussing how to get around the tree by-law to cut down more trees to improve the view. His entire life and source of income is book writing and speaking fees.

    Another friend of mine organizes green events. She gleefully found something she believed to be Indian artifacts on her property and look the good leftie she is she gave them to the local University. She has now unleashed a bureaucratic nightmare on herself and is required to have an archeological assessment done. I know it can cost her up to $500,000 as it happened to someone I know. She thinks it is a mess, but won't cost her too much. She has no idea what she did to herself. If I found an arrowhead on my property I'd go plant it on my ex-wife's lawyers yard and phone the authorities.

    Everybody on the left loves regs, until such time as they have to deal with them. Then, they're outraged. Which is why the most organized left group in Canada, feminist women along with the abortion lobby, has the one area of life in Canada with zero regulations - abortion on demand.

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