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    The Over-Regulated David v Goliath

    By Daniel Betti

    An August 2022 poll by Pew Research Center showed a decline in the favorability of both socialism and capitalism among Americans. In it, 36 percent of Americans registered a “very” or “somewhat” positive view of socialism. 57 percent of Americans expressed a very or somewhat positive view of capitalism. In 2019, socialism and capitalism had, respectively, a 42 percent and 65 percent approval rating; both are sliding downward in popularity. Given the national and global events since 2019 (COVID, increased energy prices, and inflation), the decline is no surprise. Given the political culture, it is a wonder capitalism rates so well.

    Gallup offers additional information which provides some insight into the matter. According to Gallup, 68 percent of Americans expressed “a great deal” or “quite a lot” of confidence in small business in 2022. They felt similarly in 2019, though the number had increased to 75 percent in 2020 before declining to the aforementioned 68 percent mark. Small businesses far surpass most of the competition in this poll on confidence in U.S. institutions, including the three branches of the federal government. Congress barely registers at all with a 7 percent confidence score. In 2019, Americans had placed greater confidence in the military (73 percent) than small business, but small business eclipsed the military in 2022 (68 percent to 64 percent). The military is the only institution which comes close to parity with small business. The confidence earned by small businesses is a good sign for American individualism, ownership, and opportunity. This is likely what buoys American support for capitalism.

    On the other hand, people are not so confident in big business, banks, or large technology companies. American support for capitalism seems tempered by the character of the businesses in question. This lack of confidence in bigger businesses likely feeds into support for socialism, by which people most likely mean public regulation of banks, big tech companies, and the like. In some respects, the simultaneous support for small business and distrust of big business is reminiscent of Teddy Roosevelt’s “trust busting” from more than a century ago. In place of government regulation, red-tape, or outright control, trust-busting the “Bigs” of business, banks, and tech can seem like a tempting program for conservative populists and democratic socialists alike. Scanning the scene, it is not clear that trust-busting or outright government control of the “Bigs” is warranted or prudent. Regulation itself is often written by those big businesses.

    Consider the aforementioned public opinion data in the context of the story of David versus Goliath and William Graham Sumner – an odd pairing, perhaps, but one with a point. Presumably people are familiar with David versus Goliath: The Philistine giant, Goliath, carried into battle an enormous spear, a hefty javelin, and a heavy sword. He donned thick armor, a bronze helmet, and defensive greaves upon his shins. The weight of all of that metal was something only a giant could bear. And the giant seemed invincible. In most fights, the larger, stronger combatant wins. No soldier among the Israelite forces dared accept his challenge to single combat until David the shepherd arrived on the battlefield. His faith unshakable, David won the duel by changing the nature of the combat. With his sling and stone, he incapacitated the giant at a distance before moving in close for the kill. Now imagine how the story may have gone, if the laws of the land had been different.

    A key moral in the story is that David is first given the king’s own armor to wear. Finding it unwieldy, David discards the heavy, restrictive armor and fights according to his own plan with his shepherd’s tools. If David looked ill-equipped for battle, the king nonetheless allowed him the liberty to fight by his own methods. What if he hadn’t? What if the rules and regulations of the kingdom forbade young David from going into battle “unprotected” and without the mandatory equipment? Imagine the surprise on the brave shepherd’s face when a king’s bureaucrat reminds him that by law he must don a helmet in combat, as required by the bipartisan Helmet Safety Act. Reluctantly strapping his heavy headgear on, David finds his vision obscured and his neck strained. Turning to leave for the duel, the shepherd is again stopped. Another bureaucrat reminds David that all combatants must wear a certified breastplate made of 100 percent government-tested-and-approved bronze. Now that he is wearing his required body armor, David finds he can barely lift his arms under its weight. Beginning to doubt his chances, the young shepherd finds another bureaucrat strapping bronze greaves to his shins. “A standard regulation,” the bureaucrat says while fastening the armor plating to his legs. Alas, the young shepherd must follow the rules. Now David finds he can barely even lift his legs as he walks to meet his enemy. If he had intended to use his quickness in the duel, he knows he would not be able to dart and dodge at all in the confrontation. His courage flags.

    Despite these hindrances, David still trusts in his weapon: the sling. From a distance, he will strike the giant down. David has trained with his sling and has full confidence in his aim. Unfortunately, poor David did not know that his sling had been ruled an assault weapon years ago. Another bureaucrat takes the weapon from his hand and considers whether to file criminal charges against him for illegal possession of an assault sling. The King, taking some pity on the doomed combatant, offers him a quality spear for the fight – one that meets proper regulations, of course. Sadly for David, he has no training with a spear and has little idea how to use it except to stick the pointy end at the other fellow. He knows there must be more to the technique than that, but has no time to learn. One does not need much imagination to see how the duel will end now. David, encumbered with armor he cannot carry and armed with weapons he cannot wield, is quickly dispatched by the giant Goliath, who comfortably fights on his own terms, which just happen to be enshrined in law. What a story David versus Goliath becomes after rules, regulations, and the bureaucracy intervene.

    This retelling of the story of the over-regulated and defeated David is drawn from two essays of William Graham Sumner: The Forgotten Man and What the Social Classes Owe Each Other. In the late 19th century, Sumner warned about the tendency of advocacy groups to regulate ordinary individuals in the interest of some other group. He likewise surmised that established (“big”) businesses would use government regulation to entrench their place in the economy. Sumner’s social Darwinism may be an unpopular throwback today, but certain of his points remain relevant, if not prescient. Indeed, he all but foresees the iron triangle (a key term to understand how legislation is crafted and implemented in American government) as a threat to liberty, democracy, and the competition of a free market

    Who ends up making the rules and regulations in Washington, DC? An iron triangle is a unit of policy-making that ties a special interest group to a congressional committee to an executive branch agency. This three-pronged association of a big business, the rule maker, and the rule implementer tends to be a self-contained unit of power. Little outside influence penetrates the triangle and the wealthiest voices carry the day in securing legislation. The will of the people may put Congressmen into office, but that influence fades when powerful interests send lobbyists to hold the ear and attention of the elected officials. After passing rules and regulations favorable to a particular special interest, the relevant executive branch agency makes sure everyone else in the competition plays by those rules. Sumner decried this type of political machination. He did not call it “capitalism” to use government regulation to entrench the power of a particular business in a broad industry. He called it plutocracy and jobbery. Nor did he propose anything like socialism as a remedy. More truthfully, the iron triangle is what results from the attempt at socialism.

    Sumner called for the forgotten man to be remembered. He argued that the best way to ensure the liberty of the individual was to refrain from placing rules and regulations on his activities. The best way to fight against “the Bigs” in society is not to create a big government, but to enable innovation. Let individuals compete as they will. Rather than empowering interest groups in a vain attempt to pick winners, leave it to the free competition of the free market. The same logic applies to the idea of breaking up monopolies as well.

    There are voices calling for the breakup of Big Tech companies, and not without some reason. Companies like Google, Facebook, and Twitter, among others, play a large role in society and politics today. They do not exactly play fair either, even if they are playing by the rules. If some people are not fans of any of those big companies, other people clearly are. Those companies are popular because people like what they offer (that’s often how popularity works). Is it proper for an individual or group to use the government to regulate the businesses others use for selfish reasons of personal preference or for reasons of competitive advantage? A better idea is to create alternatives to those companies. A company called Brave offers a web browser and search engine for anyone who wants to de-Googlize their voyages on the internet. Protonmail is an alternative email provider to Gmail. All sorts of competitors are emerging to challenge social media and streaming giants Youtube, Facebook, and Twitter, including Rumble, Gab, Odysee, and Truth Social. Entrepreneurs and innovators have created these companies and others to compete in the free market against those Big Tech companies.

    Shop around and anyone can find options and alternatives in the free market. Even in higher education, beset by accreditation and regulation, new and old universities offer alternatives to compete with the established public system. The brand new University of Austin is one such project. Isn’t competition the better way to defeat a giant, by offering an alternative company to provide that service to the people?

    There is something about having a giant in the neighborhood that inspires giant-slayers, if nothing else. Dislike for something, whether a bully, a business, or a government, fires and spurs ambition–especially the ambitions of youth. That ambition fuels innovation, progress, and reform. If the ambitious are stifled by regulation in their quests, if they are stymied by rules written by their competitors and enforced by the biggest of the Bigs (Big Government), then we can expect Goliath to slay David. Forced to wear the armor made for someone else, forced to comply with rules that prohibit the use of his talents, he never had a chance in that telling of the story.

    Daniel Betti

    Daniel Betti is Professor of Government at Collin College where he teaches courses in American Federal Government and Texas State Government. He earned his Ph.D. at Texas A&M University.
    His research interests include the writings of Plato, Alexander Hamilton, and G. K. Chesterton, along with a general interest in the topic of American government.

     

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    C E Voigtsberger
    C E Voigtsberger
    1 month ago

    Reminds me of the cartoon that circulated some years ago of the cowboy who is so laden with OSHA required safety equipment to the point where the horse cannot carry him.

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