Some Thoughts From an Unregulated Economist
By Don Boudreaux
I just heard an announcement on NPR that the show Market Place will, later today, feature a report on “the largely unregulated industry of fantasy sports.”
The term “largely unregulated” is meant to imply “dangerous for consumers or users – dangerous to their persons or to their purses or to both.” This term is frequently prefixed to the name of an industry whose participants have yet to be saddled with, bridled by, or (in some cases) spurred on artificially by government-issued diktats and government-mandated oversight by bureaucrats. Calling an industry “unregulated” (or “largely unregulated”) suggests that something is amiss – that the owners of firms in such an industry can pretty much do whatever the hell they damn well please. The victims of this alleged freedom from regulation are, of course, consumers and workers in the industry. Not to worry, though: government regulators will set things aright with their diktats and oversight.
In fact, as many sensible people have pointed out in many other places – and as I think to myself whenever I hear an industry described as “unregulated” – the absence of regulation by government does not remotely mean the absence of effective regulation. Consumers’ and suppliers’ (including workers’) ability to say ‘no’ to industry offers is an important and effective form of regulation. So, too, is the freedom of entrepreneurs to enter those industries. Such market-supplied regulation is real and effective, especially when it is combined with the basic common-law rules of property, contract, and tort.
But as I listened to that NPR announcement today another thought crossed my mind: I have never heard religion in America described as “largely unregulated”; nor have I ever heard warnings that the press in America is “unregulated.” And yet, religion and the press in America are indeed largely unregulated by government. No preacher must first obtain from the state a license to preach; no newspaper must be granted permission by any government in the U.S. to report the news and to editorialize on politics; no political, news, or religious website in the U.S. is shut down if it fails to meet minimum government standards; there are no government-erected job requirements for working as a reporter, as an editorialist, or as a blogger.
Churches and the press in America are regulated only by the forces of market competition and by the basic rules of common-law property, contract, and tort.
And yet, in America these “unregulated” industries thrive. They seem to satisfy their customers without simultaneously screwing their suppliers. (Please, no jokes about Catholic priests.) While no one would dare describe religion (or churches) in the U.S. as perfect or ideal – and ditto for the press – the sense seems to be that these industries by and large work well and serve useful social functions consistent with the demands of their consumers. Put differently, there’s no real worry throughout the land that, unless government regulators enter the picture to ‘regulate’ churches and the press with the same sorts of diktats, oversight, and self-righteousness that are used to regulate the likes of pharmaceutical companies, banks, and plumbers, Americans will be damaged beyond repair by the recklessness of churches, by the greed of press barons, or by the irresponsibility of reporters.
Of course, the reason churches and the press are largely unregulated in America is the First Amendment. If you ask the typical American to justify this policy of keeping government’s hands off of churches and the press, he or she is likely to say something about how especially important these industries are to society. I would not disagree. But if society’s most important industries are best left unregulated by government – if the absence of regulation is understood to promote, by and large and over the long-run, the most socially favorable outcomes from churches and from the press – why do most people assume that the absence of government regulation of other industries, industries less important to society, is antedeluvian or lamentable?