patrick.net

Wow, $134k per small business. Sounds very high, and sounds very fishy.

Here is the big question: How was "regulation" defined?

I scanned the linked material quickly to see if there was any mention of the DEFINITION. There was none as far as I can see.

Taking that into account, and also seeing that the link is from the blog "Ayn R Key" (inspired by Ayn Rand, I presume, A.K.A. the infamous libertarian author), I will discount the claims heavily until I see some solid definitions and some solid evidence is presented./

It's always tricky to consider things like this. I agree, the $134K number seems really high, but even if it is correct, what would be the cost of running without regulation? If, for example, there were no regulations around disposal of waste chemicals, what would be the long-term health effect in the areas surrounding producers? What would that cost, exactly, and to whom? Or do we only care that the local hospitals would have lots of business?

The recent financial meltdown illustrates that businesses on aggregate do not regulate themselves well when doing "the right thing" conflicts with their stated mission of improving the bottom line. This is nothing new. There is a sixty year old old play called All My Sons (1947, Arthur Miller) which addresses the exact same issue. It makes sense, doesn't it? If your primary goal is to make money, then everything else is necessarily secondary, or tertiary. That is why we need regulatory bodies with the primary goal of making sure that the right thing happens more often than not.

By the way, I really enjoyed reading just about everything Ayn Rand wrote, but she was mistaken about some things. Her businessman and businesswoman heroes tended to act in highly ethical ways, arguably because doing so served their self-interest. But that view of self-interest is too broad and too far-sighted for many. When businesses and individuals act from a narrower, short-sighted version of self-interest--and often enough they do--we develop the kinds of problems which require regulation.

I was skeptical too, except the report was commissioned by the State of California. It was conducted by professors at State Universities and was ultimately printed in the Small Business Administration of the State of California.

If the report had been done privately, the criticism would be that there was a secret agenda, or some such thing, to discredit government...but the report was done by Big Brother himself.

Small businesses make up the vast majority of all businesses in California. Its not a good idea to shackle, restrain or kill the golden goose that employs people who pay taxes...is it???

Quite a set of Libertarian blogger-imposed conclusions on this study.

COST OF STATE REGULATIONS ON CALIFORNIA
SMALL BUSINESSES STUDY

So the gain of eliminating ALL regulation and payroll taxes and insurance requirements and induced overhead? They say in their study it would amount to one employee per small business.

What is the COST of doing exactly that? This study only examines costs. They do not cover the BENEFIT nor consider why they exist. In a purely factual scientific sense WITHIN the scope of the study a surface skim it looks OK. However then we head off into Libertarian interpretation stratosphere.... where the core belief is that all regulations and overhead are illegitimate and must be abolished, and anything we can interpret as bolstering our viewpoint is grand. I was a College Libertarian so I ruefully recognize the framing.

Quite frankly if you tell me you want to fire all the county food inspectors because restaurants can police themselves and you can hire another busboy, you're going to get laughed out of the room. Just to use the simplest and most obvious example.

You people forget that regulations and indeed government exists for a reason, people want their toilets to flush and the waste to be properly processed. They want clean water, they want "safe" food and drugs, they want the fire department to come and put out their kitchen fire and not burn down half the city, and a list of other expectations for a civil society. The regulatory environment and infrastructure built on satisfying that may not be efficient it may not be perfect, but it is a RESULT of people demanding it exist. It is not some monkey that just jumped on our back without approval and that we need help throwing off.

I'm not even sure what the average number of employees in a small business is. By Federal standards in many areas up to 500 people is still a "small business" with some like Petroleum refining going up to 1,500. Is that Dad's Garage or Mom's Diner? No. Great you've added one median-wage job to Consolidated Pesticide so now we can employ 501 people, and can dispense with all that pesky inspections and regulations. They can dump their waste products in the river to save some money, and tell their workers forget about safety standards. Congratulations on saving us all from the sin of regulatory overhead, Utopia at last!

I suspect in Rand Utopia, it'd be LAW OF THE JUNGLE overnight. I just want to get hired onto the death panel at Ayn Rand Memorial Health Insurance Company, so I can decide your Grandma doesn't deserve heart medicine because she is no longer productive. That is the cold calculus of looking at nothing but COSTS in any and all instances and following profit as your unwavering God. I am reminded of the infamous meeting of Brooksley Born with Alan Greenspan. He said "we're not going to agree on much, you probably think fraud exists don't you?" and started expounding his view that the best thing she could do at CFTC was sit on her hands and look the other way. He really believed that markets were perfectly self-regulating and that the concept of an agency to prosecute securities fraud was immoral because of the overhead it imposed. Because in the Rand Utopia fraud will take care of itself as everyone learns caveat emptor the hard way.

V- A standard definition for the size of small business is one having fewer than 100 employees (BNET Business Directory).

While there is no universal definition of what constitutes a small business, approximately 80% of all U.S. businesses have fewer than 20 employees. (U.S. Census Bureau, 2004)

What has NO definition what-so-ever, anywhere, is what a dollar is. There is no statute, rule, law, or regulation that defines just exactly what a dollar is. That in itself is dishonest, wouldn't you agree?

Honest Abe says

V- A standard definition for the size of small business is one having fewer than 100 employees (BNET Business Directory).
While there is no universal definition of what constitutes a small business, approximately 80% of all U.S. businesses have fewer than 20 employees. (U.S. Census Bureau, 2004)

Great, so your restaurant gets to hire that 21st waiter, or your construction company can hire another illegal, in exchange for throwing off the yoke of The Man. With the assumption of course that the company owner won't simply pocket the difference instead and buy a new Porsche, which is another outcome. BFD!

What has NO definition what-so-ever, anywhere, is what a dollar is. There is no statute, rule, law, or regulation that defines just exactly what a dollar is. That in itself is dishonest, wouldn’t you agree?

Honest Abe says

What has NO definition what-so-ever, anywhere, is what a dollar is. There is no statute, rule, law, or regulation that defines just exactly what a dollar is. That in itself is dishonest, wouldn’t you agree?

Dishonest? No. Intentionally vague? Yes.

A "dollar" is a monetary unit now divorced from any physical reality.

It wasn't always so. As I'm sure you're aware, Alexander Hamilton defined the original US dollar as solid money exactly equivalent to the Spanish silver dollar, which was the common currency of the day.

There have been other dollars, of course.

http://en.wikipedia.org/wiki/Trade_Dollar_(United_States_coin)

Since Asian countries wouldn't take our paper money in the 19th century.

Federal Reserve Notes are currently an optional dollar-denominated currency. You can refuse to take them as payment if you so desire (except for dollar-denominated debts owed to you).

There also entities known as US Notes, which have been historically issued by the Treasury directly into circulation, bypassing the Federal Reserve. The Supreme Court didn't approve of this initially but a couple of appointments by President Grant changed their mind.

Then there's silver certificates.

FRNs main source of value, outside the public's general present willingness to use them as a means of exchange in commerce, is that the state and local government only take tax payments denominated in these particular dollars, and of course dollar-denominated debts can be extinguished with the tender of legal US Dollars of whatever provenance.

A dollar is a dollar after all.

In law Congress could replace "dollar" with "common monetary index of value" and nothing would change.

Buy gold.

Quark: "I wonder who came up with the idea of suspending liquid latinum inside worthless bits of gold."
Dax: "Probably someone who got tired of making change with an eyedropper."