Regulatory Ignorance

regulator - a mechanism for governing flow or maintaining speed

“Competition has been shown to be useful up to a certain point and no further, but cooperation, which is the thing we must strive for today, begins where competition leaves off.”
― Franklin D. Roosevelt

"Men of leisure are never deficient in the ingenuity needed to enable them to outwit laws framed to regulate things which cannot be entirely forbidden... He who tries to determine everything by law will foment crime rather than lessen it.”
― Baruch Spinoza

Dog-whistles and rainbows

Like other important sociological concepts, the word “regulation” is superficially loved or hated in America [pretty much along political party lines] without the slightest idea of [or any honest attempt to understand] its socio-economic role and importance. For most minion-minded voters it has become a dog-whistle which the left welcomes as the friend of justice but which the right abhors as the enemy of liberty.

However “regulation” can also be understood as a sociological spectrum which helps us orient ourselves vis-a-vis one another.

Archetypes of Sociological Regulation ~ Jefferson’s self-evident truths Jung’s collective unconsciousness
Peace ~ de Tocqueville’s Manners Bastiat’s Law			War
Liberty		Justice	Defense	Aggression
Frontier	Private Property	Common Wealth	Border	Colony
Isolation	Competition	Cooperation	Exclusion	Subjugation

 Whether or not Jefferson's self-evident truths are merely part of a larger set of "natural laws", they resemble something Carl Jung called our collective unconsciousness:

“My thesis then, is as follows: in addition to our immediate consciousness, which is of a thoroughly personal nature and which we believe to be the only empirical psyche (even if we tack on the personal unconscious as an appendix), there exists a second psychic system of a collective, universal, and impersonal nature which is identical in all individuals. This collective unconscious does not develop individually but is inherited. It consists of pre-existent forms, the archetypes, which can only become conscious secondarily and which give definite form to certain psychic contents.”
— Jung, The Archetypes and the Collective Unconscious (London 1996) p. 43

“The [pre-]existence of the collective unconscious means that individual consciousness is anything but a tabula rasa and is not immune to predetermining influences. On the contrary, it is in the highest degree influenced by inherited presuppositions, quite apart from the unavoidable influences exerted upon it by the environment. The collective unconscious comprises in itself the psychic life of our ancestors right back to the earliest beginnings. It is the matrix of all conscious psychic occurrences, and hence it exerts an influence that compromises the freedom of consciousness in the highest degree, since it is continually striving to lead all conscious processes back into the old paths.”
— Jung, Collected Works vol. 8 (1960), "The Significance of Constitution and Heredity in Psychology" (1929), ¶229–230 (p. 112)

The important point in all this for us is [as Aristotle noted] that if we [as finite beings] wish to engage in logical extrapolation of our ideals [backwards and forwards] then we must assume [not unreasonably but without conclusive proof] that there was [and still is] some unmoved mover … which is both a first cause and a final end … which not only enables but which must be served by all the intervening ideologies in their proper sequence. And if we accept such “progressive” thinking, it raises vital questions about the foundations for and limitations of all social forms of regulation.

Etymology only goes so far

The word "regulation" descended to us from the Latin “regula” which simply meant "a straight piece of wood [or a ruler]". As early as 1620, it began to take on a more limited and politically nuanced meaning of "governing by restriction". By the time of Adam Smith it was laden with specific civil-administrative and jurisprudential import which rendered it unavailable for foundational use in the developing vocabulary of economics.

For those on the political right in the modern world who instinctively object to “regulations” as “state interference”, consider why you never worry about getting a “gallon” of gas regardless of where you fill up [and then read the US Constitution Article 1.8.5]. Or if you are more thoughtful and daring, ponder this observation by the free-market economist FA Hayek:

“There are fields where no legal arrangements can create the condition on which the usefulness of the system of competition and private property depends: namely that the owner benefits from all the useful services rendered by his property and suffers for all the damages caused to other by its use. … In such instances we must find some substitute for the regulation by the price mechanism … [such as] direct regulation by authority [as opposed to free markets].”

And for those on the political left who cheer on the public regulation of our lives as divinely inspired, please admit that there can always be too much of even a good thing. And remember what Hayek said to you.

“The fact that we sometimes have to resort to direct regulation by authority … does not prove that we should suppress [free-market price based] competition where it can be made to function.”

The elephant in the room

Unfortunately both the right and left seem to be quite happy to have the Federal Reserve [which is a private entity] unilaterally and brutishly regulate the most basic and important public medium of social interaction ... our money and our credit ... which results in practical but invisible central economic planning of which very few are even aware and to which even fewer can imagine alternatives [even if the Fed were to permit them ... which it will not in its role of public defender of our economic security].

And to make matters worse, the Fed was designed to be schizophrenic which means it regulates with an empty head, a malignant heart and an iron fist ... all at the same time ... in a manner that is unnecessary and unconstitutional [read Article 1.8.5 again] and which is causing serious environmental and economic maladjustments which are distorting and straining nature and humanity worldwide.

But "why" [in economic terms] does financial regulation make a difference?  Basically because fiat money and credit is actually designed to work by economically misleading [aka "stimulus"] the public using clandestine [and now tyrannical] regulation of the "value" [in terms of purchasing power] of money which [in the form of "prices"] is critical for properly allocating resources across individuals [as well as over time] in free market exchanges.

In other words, manipulating money is the most insidious form of all regulation because it secretly and systematically distorts the basis for all free market exchanges needed to "regulate" the flow of income [and thus the accumulation of wealth] by preserving the vital balances ... between the present [consumption] and the future [savings] ... and between the use of manpower [labor] versus machines [capital] in the production of goods in the real economy.

"There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose." The Economic Consequences of the Peace, JM Keynes

Try the link to the FROTH blog [on the left of this posting] if you want to learn more about the regulation of our money.

Did we miss the wake-up call?

It is past time for simple-minded American “party-line” voters to let go of their thoughtless prejudices and get educated about the proper roles and forms of "regulation", both private and public, that govern our social interactions.

This will require us to recover many of the important words and concepts which we have lost or allowed to become so heavily propagandized that they are no longer usable in meaningful sociological dialogue. But rediscover and/or recover them we must if we hope to chart a different course in the future for people in communities, cities, states and nations around the world.