Drowning in Law: A flood of statutes, rules and regulations is killing the American spirit
Government is broken and the economy is gasping. The reason is the same: Americans no longer feel free to roll up their sleeves and make the choices needed to fix things. Governors come to office and find that 90% of the budget is pre-committed to entitlements and mandates enacted by politicians long dead. Teachers no longer have authority to maintain order in the classroom.
Legal mandates and entitlements have accumulated, like sediment in the harbor, until it is almost impossible for Americans to get anywhere without trudging through a treacherous legal swamp. Only big businesses, not small entrepreneurs, have the size (and legal staffs) to power through the legal sludge.
America will thrive only so long as Americans wake up in the morning believing they can succeed by their own efforts. Innovation, not cheap labor, is the economic engine of America. The net increase in jobs since 1980, according to research at the Kauffman Foundation, is attributed solely to newly-started businesses.
Unleashing these powerful human forces requires, however, an open field for individual opportunity — bounded by reliable legal structures that enforce contracts and other important social norms.
Instead, the land of opportunity is more like legal quicksand. Small business owners face legal challenges at every step. Municipalities requires multiple and often nonsensical forms to do business. Labor laws expose them to legal threats by any disgruntled employee. Mandates to provide costly employment benefits impose high hurdles to hiring new employees. Well-meaning but impossibly complex laws impose requirements to prevent consumer fraud, provide disability access, prevent hiring illegal immigrants, display warnings and notices and prevent scores of other potential evils. The tax code is incomprehensible.
All of this requires legal and other overhead — costing 50% more per employee for small businesses than big businesses.
The sheer volume of law suffocates innovative instincts, while distrust of lawsuits discourages ordinary human choices. Why take a chance on the eager young person applying for a job when, if it doesn’t work out, you might get sued for discrimination? Why take the risk of expanding production in another state when that requires duplicating legal risks and overhead? Why bother to start a business at all?
Over the generations, the American spirit of individual opportunity has been manifested not only in new businesses, but in the civic and public life as well — in the culture of barn-raisings and boy scouts and cake sales. These deep roots of our common culture — which Tocqueville referred to as “self-interest, rightly understood” — have also atrophied before our eyes. Hardly any social interaction is free of legal risk.
Doctors are conditioned by our lawsuit culture to see patients as potential plaintiffs and practice medicine wearing blinders of reimbursement bureaucracy. Every incentive is upside down — driving up health care costs to almost double that of other developed countries. The new healthcare bill does almost nothing to fix this, and instead stacks 2,700 pages of new requirements on top of the giant heap of old law.
Schools are bureaucratic viper pits. Mandates from Washington, from state capitals and from aggressive local districts transform teachers into pedagogical drones. Because of fear of lawsuits, they’re told never to put an arm around a crying child. Good teachers quit, surveys show, because they don’t feel free to do what’s right, or indeed, even to be themselves.
Government itself is choking on accumulated law. The simplest choices take years to grind through labyrinthian requirements mandated by obsolete laws. Good public management takes superman, because accountability is nonexistent. Firing an insubordinate civil servant is even harder than firing a teacher.
Forget about building public works — that occurs on a tectonic time frame, with shovels in the ground maybe a decade or longer after the decision is made. Wind farms off the Massachusetts coast were approved this year after a decade of review by 16 different agencies — and then challenged again the next day by a dozen lawsuits.
Clearing away the poisonous legal overgrowth does not require genius. It just requires different choices. Balancing budgets demands we pare back legal mandates, entitlements and subsidies. Containing healthcare costs requires realigning incentives so that patients and doctors have a financial responsibility to be prudent. But those choices are impossible in the current legal jungle.
“Good ideas to reform government,” New York City Deputy Mayor Stephen Goldsmith recently remarked, “are often illegal.”
America can’t move forward until it cleans out this legal swamp. The accretion of law has made democracy inert — a sludge heap of programs and entitlements swarming with special interests — while also slowly suffocating the American spirit.
Changing leaders or parties will not solve this problem. Decades of accumulated law and bureaucracy have made it impossible for anyone to use common sense. A new President can ride into Washington on the mighty steed of public opinion — Yes We Can! — but will immediately get stuck in the bureaucratic goo.
What’s required to revive America is major structural overhaul. This is a task of historic proportions — not unlike the simplification of law by Justinian in ancient Rome. Our founding fathers never imagined that democracy would become a one-way ratchet — always adding laws but never repealing them. Nor did they intend law to be a form of central planning. The Constitution sets forth our governing goals and principles in only 16 pages.
The core principle of this overhaul should be this: Restore free choice at every level of responsibility.
For example, let all public schools operate with the same freedoms, and accountability, as charter schools. Give officials the responsibility to balance different interests — not be forced by legal threats to give away scarce common resources to whoever threatens a lawsuit. Make public employees accountable for failure — but at the same time, stop telling them how to do their jobs.
A great streamlining would re-invigorate democracy. Cleaning out old mandates and entitlements would allow political leaders to make choices to meet today’s needs. Radically simplifying law would allow people, including members of Congress, to actually understand it.
The goal is not to build a libertarian utopia. A crowded society requires regulatory red lights and green lights. The goal is to pull law back so it provides a framework for free choice, not a software program that tries to dictate daily choices.
The fatal flaw of the modern state is that it doesn’t honor the human element of all accomplishment. Rules don’t make things happen. Only people do, making fresh choices in response to the infinite complexities of daily challenges.
“We are not far from the point,” Nobel economist Friedrich Hayek warned in 1960, “where the deliberately organized forces of society may destroy those spontaneous forces which have made advance possible.” We may finally be there. Government is basically bankrupt, and the accretion of law is suffocating individual initiative. Nothing will work until we clean it out.
Originally published at www.nydailynews.com on October 10, 2010.