Issue 536 Do Regulations Prevent Unemployment February 26, 2015

Well, I am here to say, yes it does.  Even though I am a libertarian, I have to admit that regulations can prevent unemployment, but they do at a cost.  Let's discuss.

Regulations slow progress:  Ok, the reason why regulations are able to stave off unemployment is because they slow down the creative and destructive influences of a free market economy.  So the reason why we do not have a better more comfortable seat belt is due to regulations setting a standard that everyone follows out of fear of being sued for breaking that standard.  The internet is not as free as it can be is due to the licensing of who can make Ethernet pipes.  How about the oil companies and fossil fuel fired power plants?  They are kept alive by regulations by artificially increasing the costs to study and implement safer and cheaper to make nuclear power.  These regulations partly exist for safety, but also to protect the established businesses that exist, but would be supplanted by the newer businesses and technology.  However, when regulations are slowly repealed these established companies have a better chance of adapting to newer technology and shifts in public attitudes.  As such, they are able to train employees in the new standards and technologies without fear of being completely left behind.  So slower progress due to regulations means more people can adapt to changes and thus they are less likely to lose their jobs.

Conclusion:  While I do not want people to lose their jobs, regulation if applied wrongfully creates monopolies of power for established businesses.  As such more regulations become established to keep the biggest businesses from having to compete with smaller upstarts that may usurp them.  So this is a double edged sword.  As such, regulations implemented strictly for safety are good.  However, any regulations no matter how well intentioned are bad as you are in fact preventing the creation of jobs thus stopping the employment of others to save the jobs of those who already have them.