The Right to Rise

Jeb Bush published an interesting op-ed in the Wall Street Journal last week, noting Congressman Paul Ryan's recent characterization of economic freedom as "the right to rise."  As Bush said, the right to rise entails the right to take risks.  Government needs to let people take risks, to let them suffer the consequences of bad decisions and, importantly, to let them enjoy the benefits of good ones.  Yet, government too frequently does the opposite. In the interest of protecting us from bad investments, losing a job, poor health--nearly anything negative that might befall us--it seeks to take away the rewards of work and investment, or the return on risks that pay off.

But when it comes to economic freedom, we are less forgiving of the cycles of growth and loss, of trial and error, and of failure and success that are part of the realities of the marketplace and life itself.

Increasingly, we have let our elected officials abridge our own economic freedoms through the annual passage of thousands of laws and their associated regulations. We see human tragedy and we demand a regulation to prevent it. We see a criminal fraud and we demand more laws. We see an industry dying and we demand it be saved. Each time, we demand "Do something . . . anything."

Bush rightly condemns over-regulation, but he does not go far enough, in my view.
He argues that it would be better if there were fewer regulations, which could be imposed only after meaningful cost-benefit analyses, and which would sunset to prevent inertia from continuing their existence. The problem with a statist or Leftist view of government regulation is not merely that it regulates too much; it is that it regulates that which should not be regulated at all. As Bush seems to acknowledge, interference with the right to rise, which is what statists seek most to control, seeks to regulate in the interest of protecting us from ourselves.  But that is not the proper role of government. Government economic regulation properly limits only that which can cause harm to others. Bank capital reserves, consumer protection laws, securities disclosure requirements, and similar restrictions on economic transactions are legitimate because they prevent or punish harm done to others. Statists want to go further and protect banks, consumers and securities issuers from their own bad decisions, but in exchange demand to make nearly all the decisions themselves. There is no legitimacy in that regulation, and we are not significantly better off if we just have "less" of it, or if it is imposed only after costs and benefits are allegedly weighed.

Before you conclude I advocate libertarianism, let me hasten to add that government acts perfectly legitimately to protect us from ourselves in a broad range of conduct. In general, such proscriptions are legitimate because they protect society, including its moral fiber. Laws banning drug abuse, for example, act primarily to prevent harm to oneself, but clearly benefit society by discouraging the decay of its moral fiber--decay caused by individuals who abandon work, family, and productive endeavor of all kinds to satisfy their addiction. But laws protecting us from our own immorality are just as legitimate, even if our conduct could cause no harm to anyone else. Society, and government, have a responsibility to promote right over wrong, including on an individual basis. By contrast, government does not have a responsibility to prevent us from making bad decisions with our money. "Economic libertarianism" therefore best promotes economic liberty.