In intellectual debate, I find a special charm when someone plays the proverbial “reverse card.” This is when an argument usually deployed in one direction gets applied to reach an opposite conclusion. For example, many political theorists argue for political authority and state intervention using ideal theory – but Jason Brennan played the reverse card to argue that ideal theory, if applied consistently, would actually support a stateless society operating according to free market capitalism. Chris Freiman applied his own reverse card arguing that consistent use of non-ideal theory would also support free market capitalism. Dan Moller’s reverse card argued that a worldview harboring a modest view of individual rights and a strong respect for our neighbors and community leads to libertarianism and the abolition of the welfare state.
Of course, like all modes of argument, the reverse card can be done well or poorly. I’ve occasionally seen attempts to use arguments traditionally associated with conservatism or libertarianism in defense of the regulatory state. Here I describe just one, in the hopes that it will forever be banished from discourse and spare me the secondhand embarrassment I experience when I see it invoked in this way. The argument I’m talking about is Chesterton’s Fence.
Chesterton’s Fence is an argument against hasty abolition of laws, institutions, or customs, courtesy of G. K. Chesterton. Chesterton imagines someone coming across a fence in a field for which he sees no point or purpose. A reckless reformer might say “Well, I don’t see any purpose being served by this fence, so we might as well tear it down.” This is folly, says Chesterton. If you don’t see the point of something, that doesn’t provide a justification to eliminate it – it only shows the limits of your understanding. After all, the fences don’t grow in fields like plants – someone put it there for a reason. If you don’t know why the fence was built in the first place, maybe it’s there for a good reason. Some argue that economic regulations, or the regulatory state itself, is a kind of Chesterton’s fence.
To be clear, I think Chesterton’s Fence is a good heuristic. But I don’t think it cuts any ice in the argument about economic regulation, for a couple of different reasons. First, Chesterton’s Fence isn’t an argument that existing institutions should be presumed valid, full stop. What Chesterton actually says is:
The more modern type of reformer goes gaily up to [the fence] and says, “I don’t see the use of this; let us clear it away.” To which the more intelligent type of reformer will do well to answer: “If you don’t see the use of it, I certainly won’t let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it.”
So the injunction is to first understand what led to the fence being built, at which point tearing it down might prove to be the correct move after all. This is why the Chesterton’s Fence reverse card in defense of economic regulation fails. Critics of economic regulation don’t merely say “this regulation seems pointless, lets get rid of it.” Public choice theory meets Chesterton’s injunction to understand what led to these regulatory fences being created. And according to public choice, most regulation isn’t crafted to serve the public interest, but is instead largely created at the behest of lobbyists to gain special protection for themselves at the public expense. So critics of economic regulation – at least those who draw on public choice theory in their critique – have, in fact, gone off to think about why these regulatory fences were built and what purpose they are meant to serve.
And the arguments go beyond a general theory of regulation. It also consists of a body of scholarship which examines specific regulations to measure their effect. This is how Nobel Prize winning economist Ronald Coase described these findings:
Coase: When I was editor of The Journal of Law and Economics, we published a whole series of studies of regulation and its effects. Almost all the studies–perhaps all the studies–suggested that the results of regulation had been bad, that the prices were higher, that the product was worse adapted to the needs of consumers, than it otherwise would have been. I was not willing to accept the view that all regulation was bound to produce these results. Therefore, what was my explanation for the results we had? I argued that the most probable explanation was that the government now operates on such a massive scale that it had reached the stage of what economists call negative marginal returns. Anything additional it does, it messes up. But that doesn’t mean that if we reduce the size of government considerably, we wouldn’t find then that there were some activities it did well. Until we reduce the size of government, we won’t know what they are.
Reason: What’s an example of bad regulation?
Coase: I can’t remember one that’s good. Regulation of transport, regulation of agriculture–agriculture is a, zoning is z. You know, you go from a to z, they are all bad. There were so many studies, and the result was quite universal: The effects were bad.
Clifford Winston of the Brookings Institute gives a less dim assessment, but only slightly so, concluding that environmental protections have probably done more good than harm, but in every other area, economic regulations, as they are actually crafted and carried out, have done more harm than good.
(Another common response that misses the point – “Sure, you can complain that government does things imperfectly, but simply showing that something is flawed isn’t good enough. You need to show why an alternative would be better.” If something does more harm than good, then doing nothing would be better, even without an alternative. And that’s the argument being made – not that regulation is imperfect, or that it can be captured, or that it has costs. The argument is that regulations are doing more harm than good. Maybe that argument is wrong, but simply saying “nothing is perfect so what’s your alternative” is a nonresponse.)
Now, all of the above referenced arguments might be wrong. But a defender of economic regulation needs to actually make that case. They would need to say “Public choice theory is wrong about the actual point and purpose of economic regulations because [insert argument here]. Additionally, all the studies citied by Coase and all the research referenced by Winston reached the wrong results because [additional arguments].” That would be a respectable and productive response. But to simply say “sure, things are imperfect but you need to suggest a better alternative” simply fails to engage. And invoking Chesterton’s Fence is likewise toothless – the person doing so only shows they are a step behind in the discussion.
Kevin Corcoran is a Marine Corps veteran and a consultant in healthcare economics and analytics and holds a Bachelor of Science in Economics from George Mason University.
