Here's a puzzle: We don't trust business leaders to do the right thing, and we want governments to protect us as consumers by regulating business. The strange part is, we actually don't trust government leaders any more than we trust business leaders. In fact, according to the 2014 Edelman Trust Barometer, we trust them even less. Why do we count on one group of untrusted people to protect us from another group of untrusted people?
To be specific, according to the Edelman survey, 11% of Canadians trust business leaders to "make ethical and moral decisions," versus 9% for government leaders. The numbers are even more dismal when it comes to trusting them to "tell you the truth, regardless of how complex or unpopular it is": 9% and 7%, respectively. This is all well and good, because neither group, frankly, deserves our unquestioning trust. Yet 69% of us still see the government's most important business-related role as protecting consumers from business, and 43% think we need more government regulation (versus only 17% who think we need less).
What's going on? My suspicion is that many people see no alternative to government regulation when it comes to protecting consumers, even if they understand that politicians are often in bed with top industry players, that lobbying and regulatory capture largely corrupt the system. It's not great, but we have to do something, right?
Actually, there is an alternative to mountains of regulations. Instead of having governments micromanaging whole industries, to the detriment not only of consumers but also of smaller businesses that can't afford armies of lawyers to wade through all the red tape, we could rely on 1) simple rules about obvious cases of fraud and other outright crimes, and 2) the bracing competition of a freed market. If some companies try to charge too much, reduce quality, limit selection, or in any other way screw over their customers, they will lose those customers to competitors—as long as potential competitors are not prevented from competing by regulations largely crafted by entrenched players.
But don't take my word for it. (You probably won't, as according to the Edelman survey, bloggers are not very trusted.) Instead, take a little time at some point to explore what some different economists have to say about regulations and how well various markets work compared to how regulated they are. If I'm right, it's not about which people to entrust with power; it's about trusting a process that spreads that power around.
What's going on? My suspicion is that many people see no alternative to government regulation when it comes to protecting consumers, even if they understand that politicians are often in bed with top industry players, that lobbying and regulatory capture largely corrupt the system. It's not great, but we have to do something, right?
Actually, there is an alternative to mountains of regulations. Instead of having governments micromanaging whole industries, to the detriment not only of consumers but also of smaller businesses that can't afford armies of lawyers to wade through all the red tape, we could rely on 1) simple rules about obvious cases of fraud and other outright crimes, and 2) the bracing competition of a freed market. If some companies try to charge too much, reduce quality, limit selection, or in any other way screw over their customers, they will lose those customers to competitors—as long as potential competitors are not prevented from competing by regulations largely crafted by entrenched players.
But don't take my word for it. (You probably won't, as according to the Edelman survey, bloggers are not very trusted.) Instead, take a little time at some point to explore what some different economists have to say about regulations and how well various markets work compared to how regulated they are. If I'm right, it's not about which people to entrust with power; it's about trusting a process that spreads that power around.
