On the Need for Regulations and Tariffs

By Glen Wallace

I think we tend to take for granted the regulations that protect the consumer.  As an example there was the problem with the toxic drywall from China that had it been manufactured in the US perhaps the existing regulations in this country would have prevented the problems from occurring in the first place.  Additionally there are certain food and drink manufacturing regulations that we count on to insure that those products are safe to consume.  But these are the sorts of regulations that the consumer both wants and needs.  I think both of those factors must be present before regulatory restrictions are implemented on any given product.  If the consumer wants to consume something that the government believes is unsafe for the consumer, then the consumer should still be allowed to consume the product.  The government should not be taking on a 'Big Brother knows best' approach where they exist to be our masters that protect us from ourselves.  Rather government should be the servant of the people and only takes on the role of protector when we ask it to, but quickly backs off when ordered to do so as well.

The following is a post I wrote somewhere in response to a speech/testimony by Peter Schiff:

Mr Schiff is so selective in his arguments, only pulling out the best examples that appear to support his positions while selectively ignoring the glaring refutational examples.  For instance in the case of Henry Ford the workers and the economy benefited by the wisdom and benevolence of Mr Ford.  But given human nature we can not count on all the heads of business to have such virtuous characteristics.

All too many in business suffer from a case of tunnel vision nearsightedness, where if they can get away with squeezing every last dime of productivity without killing their employees they will do it.  I'm thinking of the sort of characters as Scarlett O'hara from 'Gone with the Wind' and her treatment of the prison laborers in her husbands lumber mill.  It is for those sorts that government regulation is absolutely necessary to protect the worker from abuse by the Scarlett O'haras and pre-epiphany Ebenezer Scrooges of the world.  I also think back to the working conditions as featured accurately in Upton Sinclair's book 'The Jungle'.  There wasn't much unions or government regulation then either.  What did the free market do for those workers Mr Schiff?

But on the other hand I believe supporters of heavy regulation in the US often have an out-of-sight-out-of-mind approach in ignoring how a lack of regulations on foreign businesses with regard to workers rights and the environment, creates an incentive to offshore work to those countries with factories that abuse the environment and their workers due to lack of regulations.  But when it comes time to import those foreign made goods, the pro regulation set is silent and by their silence, imply that it is perfectly fine to buy those goods and thereby support those foreign factories that may be paying slave-like wages and polluting the environment.

It doesn't make any sense to support regulation under the pretext that it is being done to protect the workers and the environment when there is no disincentive to offshore the work to countries where workers and the environment are not being protected.  As a solution I would suggest implementing a tariff system that varies inversely with the level of regulation in the country of manufacture for a product.  For instance, a very high tariff would be levied against Chinese made goods whereas little to no tariff would be put on products made in Germany.