Southern Economics

Why do the proponents of free enterprise insist that governmental regulations, which aim to conserve resources and level the playing field, will result in fewer people being hired — i.e., cost jobs? If we are not to give in to our own preconceived notions that people, whose predictions are often inconsistent with facts and results, must be liars, then there must be some rational basis for this persistent error. Because, in fact, the regulations actually involve the hiring of additional personnel, if only to collect relevant data, and the massive reduction in both public and private sector employment in the last decade can’t even be tangentially related to regulations that were hardly enforced. So, how to explain the persistent myth that regulations cost jobs?

You’ll notice that’s not the thrust of my title, which actually contains the answer to the question about regulations. Regulations do cost something, but it’s not jobs. Regulations reduce profits. It’s a reduction in profit from which the formula that regulation = lost jobs is extrapolated. Because, of course, it wouldn’t be politic to identify a reduction in private profits as a rationale for laying waste to public resources and assets, especially not during a period of time when industrial, commercial and financial profits are soaring as never before.

Never mind that the profits aren’t being converted into more jobs. That might provide evidence of lying, but, as I said, that’s a preconceived notion I’m going to disregard.

The free enterprise people actually have two valid concerns about environmental regulations that require them to clean up after themselves, in particular. From an historical perspective, they’re anomalous. Because, from the very beginning, contrary to the myth of recent “regulatory capture,” the various federal agencies were originally set up to provide support for private enterprise and “level the playing field” by getting rid of pesky competitors–those who might tread on the turf old-timers had allocated to themselves. The idea that regulations might be designed to preserve resources (things that are supposed to be used up) and mandate the proper disposal of waste just wasn’t part of the play-book. Which, no doubt, accounts for the fact that the cost of minimizing waste and arranging for safe disposal never even got incorporated in the normal expense accounting model and simply appeared as a reduction in profits.

Then too, common sense suggests that profitable enterprises grow and any increase in size prompts the hiring of more people. So, profits can equal jobs, in a hypothetical sense. There’s even some basis in historical fact. But, there’s many a slip ‘twixt the cup and the lip and, in this case, a host of intervening conditions, which serve to make a half-truth worse than a lie. Not only are profits no longer invested in expanding enterprise or modernizing plant and production processes, under the new definition of competition as a contest for domination or monopoly conditions, profitable enterprises are a target for acquisition, prey for elimination and, eventually, an overall reduction in jobs.

Jobs for Americans aren’t being lost, they’re being reduced, off-shored, down-sized, replaced by machines. And the most successful start-ups aren’t rewarded; they’re set up to be destroyed. It’s the Tonya Harding definition of competition. But it wasn’t her invention. Rather, it’s industrial enterprise itself which set the stage with the principle of “planned obsolescence,” to insure a steady stream of income and profit, and which then evolved into “failure by design,” the key to longevity without innovation, until we arrived at this point in time, when enterprise that’s not designed to fail gets helped in that direction.

Because success is such a terminal condition, leaving us with that pesky question about what to do next.
It’s a question failure never has to ask. What comes after failure is for sure, certain. You just try and try again. And, since failure is the objective, doing the same thing over and over guarantees your success.

That millions of people are being deprived of productive labor is beside the point. The free enterprisers have been doing their best. Moreover, they have the profits to prove it.

See? It all makes sense.


Monica Smith

Monica Smith writes Hannah's Blog. Born in Germany, she came to the United States as a child, living first in California, then after an interval in Chile, in New York. Married to a retired professor at the University of Florida, where she lived for 17 years, she moved to St. Simons Island, Georgia, in 1993 and now divides her time between Georgia and New Hampshire. (New Hampshire, she says, is always interesting during a presidential election.) She and her husband have three children and five grandchildren. Ms. Smith says she "learned long ago that I am not a good team player when I got hired at the Library of Congress, fresh out of college with a degree in political science and proficiency in four foreign languages, to 'edit' library cards and informed my supervisor that if she was going to insist I punch the clock exactly on time, my productivity was going to fall from being the highest to being the same as everyone else's. The supervisor opted to assign me to another building where there was no time-clock. After I had the first of our three children, I decided a paycheck wasn't worth the hassle."