Last edited Wed Jun 21, 2017, 10:40 AM - Edit history (1)
... No regulatory regime is perfect. Regulations can grow into a thickety network of ad-hoc rules, of which periodic pruning and rationalisation is a good idea. Also, Davies points out, “the processes of the regulators” can be onerous even if the rules are beneficial. Some regulations themselves, too, can look like “random pointless hobby-horses of the regulators”. (Davies cites the ban on selling Swedish chewing tobacco outside that country while cigarettes remain available everywhere.) Others are “basically disguised restraints of trade”, such as those that protected incumbents in the trucking and aviation industries in the 1970s, and which became targets for the modern wave of “deregulation” (or, as some prefer to term it, re-regulation in lobbyists’ interests) promoted and expanded by Ronald Reagan and Margaret Thatcher.
“In the early days, it looked like there were some big economic wins from getting rid of them,” Davies says. And in order to get political backing for continued deregulation, it seemed useful to “massively exaggerate the just silly or obviously anticompetitive”.
This generates its own momentum. “Once you have built up the political movement and got deregulation and red tape ingrained as a vote winner,” Davies adds, “you need to keep doing it.” But the obvious candidates for removal quickly run out. So then it is tempting to start attacking those that actually protect the public, whether physically or financially. The latter are aimed at “stopping businesses from chucking part of their costs on to the public or the taxpayer”. Removing such regulations was a big win for banking in the 1980s and 90s. “The financial sector was huge in this,” Davies says. “The basic rhetorical form was to assert that highly paid and high-calibre banks knew how to run their own businesses better than speccy civil servants, thank you very much, and that all these capital requirements and conduct rules were just things that had been dreamed up in a backroom somewhere by someone with no real understanding of the business.”
That basic rhetorical form led, eventually, to the global crash. And what is less visible than outbreaks of poisoning or accidents, but just as real, is the fact that such rhetoric can be fatal. The crisis that resulted from deregulated casino banking led to at least 10,000 “economic suicides” in the years that followed, according to a 2014 paper in the British Journal of Psychiatry. Add to the death toll of the financial crisis and those who die in unsafe buildings the scores of thousands who die yearly from pollution and extreme weather events attributed to global warming, owing to the under-regulation of energy industries, and one thing becomes very clear. An ideological commitment to destroying regulation kills many more people than terrorism, around the world and all the time...
https://www.theguardian.com/politics/2017/jun/20/deadlier-than-terrorism-right-fatal-obsession-red-tape-deregulation-grenfell-tower
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