Audio Clips

30 December 2009

Regulatory Harmonization

The firm I work for has been encouraging us for months to contact our congressmen and encourage them to enact industry standards that would harmonize across all the states. They want to have one standard with which to comply as a firm instead of 50 state-defined standards. While I sympathize with their hypothesis, that one standard would be more cost-effective than 50, I oppose giving the federal government more control over regulatory standards. The initial beauty of the federalist system was that there would be 13 social "laboratories" in the 13 original states. We should now have 50 laboratories going.

Imagine if North Dakota had developed an education system that was the envy of the country. The other states would have the freedom to adopt it or try to come up with something even more remarkable. What if Arizona had found a way to balance salaries and retirements for their state employees that did not endanger the state budget? What if Minnesota had come up with an idea to encourage private investment into mass transit? What if Nevada came up with a popular solution to water conservation concerns? What if Louisiana figured out the best way to provide power to a population? Every other state would have the opportunity to look at 49 other solutions and say "Wow! Mississippi has an ingenious plan for that problem."

As it stands now, we instead receive a one-size-fits-all solution from the federal government for education, power, financial regulation, taxation, public welfare, and thousands of other areas of common concern. That is why I oppose regulatory harmonization. It discourages the independent discovery of better forms of government, regulation, and community service. If you want to read a great article on the dangers of regulatory harmonization you can find Robert Higgs' well-articulated opposition here.