Regulatory Strangulation
ALL
POV: Have Gun, Will Nudge
by Ayn Rand | March 1962
It's Not the Unions — It's the Labor Laws
by Doug Altner | March 19, 2014
Regulatory Strangulation
by Steve Simpson | March 13, 2014
Obamacare creates a new class of free riders
by Rituparna Basu | January 23, 2014
Obamacare Is Suffocating An Already Sick Health Insurance Patient
by Rituparna Basu | January 22, 2014
The Broken State of American Health Insurance Prior to the Affordable Care Act: A Market Rife with Government Distortion
by Rituparna Basu | January 21, 2014
Obamacare is Really, Really Bad for You, Especially If You're Young
by Rituparna Basu | August 21, 2013
Justice Department should let US Airways & American Airlines merger proceed
by Tom Bowden | August 16, 2013
Why Is Apple Inc. On Trial? For Good Behavior, It Turns Out
by Tom Bowden | June 20, 2013
The Forgotten Man of the Minimum-Wage Debate
by Doug Altner | June 19, 2013
Why Delivering Beer Isn’t Easy
by Doug Altner | June 11, 2013
What Explains GM’s Problems With The UAW?
by Doug Altner | May 20, 2013
What Are The Search Results When You Google ‘Antitrust’?
by Tom Bowden | April 18, 2013
To Protect the Defenseless, We Must Abolish the Minimum Wage
by Don Watkins | March 27, 2013
I’ll Buy My Own Contraception, Thanks
by Rituparna Basu | November 13, 2012
Why The Glass-Steagall Myth Persists
by Yaron Brook | November 12, 2012
Why Ayn Rand’s Absence From Last Thursday’s Debate Benefits Big Government
by Yaron Brook | October 15, 2012
Changing the Debate: How to Move from an Entitlement State to a Free Market
by Don Watkins | July 02, 2012
3 Things Everyone Needs to Know About the Apple Antitrust Case
by Don Watkins | April 10, 2012
What's Really Wrong with Entitlements
by Don Watkins | February 21, 2012
The Entitlement State Is Morally Bankrupt
by Don Watkins | September 13, 2011
How Important Is the Obamacare Litigation?
by Tom Bowden | August 12, 2011
Atlas Shrugged: With America on the Brink, Should You “Go Galt” and Strike?
by Onkar Ghate | April 29, 2011
The Road to Socialized Medicine Is Paved With Pre-existing Conditions (Part 3)
by Yaron Brook | April 06, 2011
The Road to Socialized Medicine Is Paved with Pre-existing Conditions (Part 2)
by Yaron Brook | March 10, 2011
In Defense of Finance
by Yaron Brook | February 15, 2011
The Road to Socialized Medicine Is Paved with Pre-existing Conditions
by Yaron Brook | February 10, 2011
The Avastin Travesty
by Tom Bowden | December 12, 2010
Apple Now Targeted for Success Like Microsoft Was in the 1990s
by Tom Bowden | October 04, 2010
The Un-American Dream
by Don Watkins | August 27, 2010
What About Private Health Emergencies?
by Tom Bowden | April 08, 2010
What’s Really Driving the Toyota Controversy?
by Don Watkins | March 26, 2010
Anti-Smoking Paternalism: A Cancer on American Liberty
by Don Watkins | March 06, 2010
Apple vs. GM: Ayn Rand Knew the Difference. Do You?
by Don Watkins | March 02, 2010
Smash the Labor Monopolies!
by Tom Bowden | September 15, 2009
America’s Unfree Market
by Yaron Brook | May 2009
Atlas Shrugged and the Housing Crisis that Government Built
by Yaron Brook | March 2009
The Green Energy Fantasy
by Keith Lockitch | February 25, 2009
Stop Blaming Capitalism for Government Failures
by Yaron Brook | November 13, 2008
The Resurgence of Big Government
by Yaron Brook | Fall 2008
The Government Did It
by Yaron Brook | July 18, 2008
From Flat World To Free World
by Yaron Brook | June 26, 2008
How Government Makes Disasters More Disastrous
by Tom Bowden | April 29, 2008
Life And Taxes
by Yaron Brook | April 17, 2008
War On Free Political Speech
by Yaron Brook | March 21, 2008
To Stimulate The Economy, Liberate It
by Yaron Brook | February 14, 2008
Exploiters vs. Victims in the Grocery Strike
by Elan Journo | January 30, 2004
Prescription Drug Benefits Violate the Rights of Drug Companies
by Onkar Ghate | July 24, 2002
Drop the Antitrust Case Against Microsoft
by Onkar Ghate | March 17, 2002

MORE FROM THE BLOG:

Government And Business in Voice for Reason
Government & BusinessRegulations

Regulatory Strangulation

by Steve Simpson | March 13, 2014

The Federal Communications Commission recently caused an uproar when it launched a “Critical Information Needs” study of the nation’s news broadcasters. The agency planned to interview editorial staff about how stories are selected, whether the stations might be biased in their news coverage, and how responsive they are to “underserved populations” in several categories of news that the FCC deems critical.

The FCC later dropped the study after one of its commissioners, Republican appointee Ajit Pai, criticized it in a Wall Street Journal op-ed as an effort to influence news coverage. Pai pointed out that the nation’s broadcasters would be hard pressed to ignore the FCC’s desires for fear of losing their broadcast licenses, so the study would have to end up influencing coverage. As he later said in an interview with the Daily Caller, this and other FCC efforts like it are motivated by a desire “to either directly or indirectly nudge . . . news coverage in a certain direction.”

Responding to the uproar, a writer in the Huffington Post points out that the FCC was just doing its job: “The FCC is tasked with making sure the broadcast media — via the limited broadcast spectrum which is owned by we, the people — serves the public interest.”

She’s right, but that’s exactly the problem.

The Smothering Regulatory State

In the early 1960s, in response to a similar effort by the FCC to require higher standards in children’s broadcasting, Ayn Rand wrote an essay called “Have Gun, Will Nudge” that addresses a fundamental problem with regulations. She points out that laws requiring anyone to serve the “public interest” have to end up replacing the rule of law with the rule of bureaucrats, because no one can know what the “public interest” means. What, for example, constitutes the “public’s interest” in news broadcasting? According to the Critical Information Needs study, it means more coverage of the environment and “economic opportunity,” among other categories. Who knows what any of these things mean or require? Ajit Pai points out that Fox News and MSNBC have their own views of what the public wants. But under the unknowable “public interest” standard, the only way to find out is to ask the FCC, which gets to impose its decisions by force. So much for freedom of speech in broadcast news.

You can read “Have Gun, Will Nudge” here. And if you’re interested in delving deeper into the issue of government ownership of the broadcast spectrum, be sure to check out Rand’s essay “The Property Status of Airwaves” in Capitalism: The Unknown Ideal.

The problem that Rand identifies in Have Gun, Will Nudge is by no means limited to the FCC. Virtually all regulations are based on nonobjective standards, meaning that businessmen must constantly defer to the judgment of bureaucrats. Will a drug company be able to recoup the enormous expenses of developing a new drug? Ask the FDA. Will developers be permitted to build on their land? Ask the EPA. Will companies be permitted to merge with others? Ask the FTC and the Justice Department.

For more on this, see my blog post, Chilling Commerce, Tom Bowden’s Creeping Tentacles of the Antitrust Octopus, Doug Altner’s post on Dodd-Frank, and Keith Lockitch’s op-ed on FDA control of stem cell therapy.

About The Author

Steve Simpson

Former Director of Legal Studies (2013-2018), Ayn Rand Institute