I have been asked to post some excerpts from my book written for the 2016 campaign for Texas Railroad Commissioner, Oil & Gas and the Texas Railroad Commission: Lessons for Regulating a Free Society. This chapter is titled "What it Means to Regulate". More to come depending on "demand".
A discussion of regulatory policy should begin by first considering why regulations are needed in the first place. And if needed, what form should those regulations take? As will become clear from the ensuing discussion, the issue to be addressed is how personal protections can be ensured by law and regulation in a way that does not deprive us of the very rights, freedoms, and property that government is charged with protecting.
One kind of regulation, of course, is legislation. There are mechanisms, though imperfect, that hold originators of legislation accountable. When details are too complicated to be effectively considered by legislatures, broad-brush rules are often passed that prescribe regulatory agencies such as the Railroad Commission to write and administer regulations. This essentially moves regulated activity from the legislative branch’s jurisdiction to the executive branch.
Regulations have the force of law, but are administered by designated regulators. Regulations can obviously be overly complex and prevent innovation, but they usually are at least clear. Rule-making and mechanisms for fixing regulations, as frustrating as they might be, are more accessible than legislative action. And as a final resort, decisions by regulators can be appealed to legislatures and/or the judicial system.
When legislators grant broad discretionary powers to specific regulators, there is a danger of inadequate checks and balances that normally serve to prevent executive branch abuse of power. This is especially the case when vague responsibilities are granted with no clear objective standards. Though this is not the case with the Railroad Commission, most regulators are only indirectly answerable to voters by reporting through the head of the executive branch. Oftentimes, regulatory agencies essentially act as a “state within a state”.
At the risk of oversimplification, let’s begin the discussion by assuming that the primary purpose of regulation (including legislation) is either to cause good outcomes or to discourage bad ones. Let’s further simplify the discussion by dividing regulations into those that are based on a command-and-control (CAC) paradigm vs. those that are based on a retribution-and-restitution (RAR) paradigm.
CAC regulations are those that seek to ensure outcomes through such things as code requirements, prior approvals, and inspections. In the absence of fraud, CAC regulations achieve compliance through forced behaviors before an action is allowed. RAR regulations, on the other hand, are those that seek to ensure outcomes through after-the-fact remedies such as punishment or tort actions. RAR regulations achieve compliance by establishing legal standards for harm, for which remedies can be imposed if violated.
Many believe, as I do, that governments (including both legislators and regulators) should restrict their powers to only those necessary to protect our liberties and our property. These protections should encompass personal liberties, public safety, access to our commonly-shared air and water resources, property rights, and our right to engage in free and prosperous commerce. It is unfortunate that we sometimes also need to be protected from the power of governments as well as from each other.
Giant governments as well as private giants are both particularly good at impinging on our rights and our property. We are in the most danger when these two giants collude. And watch out when the taking of individual liberties or property is justified in the name of a broadly dispersed and vaguely perceived common good.
Some who read this book may wish to imagine some future Utopian state where freedom and liberty are ideally maximized for all. That vision won’t be provided here. Rather, a more pragmatic approach is presented that focuses on a few definite, achievable, and practical actions that could be taken by the Railroad Commission and the State of Texas to move us toward a freer future. I hope that readers might be convinced that the recommendations contained in this chapter are worth considering and perhaps pursuing, even if falling short of perfection.