A New Approach to Business Regulaton

As a liberal Democrat, I favor regulation. But I also think business has a point when it complains about inappropriate or unreasonable regulation. Indeed, if the Democrats would better publicize the attention they pay to this complaint, they might do better at the polls. What never seems to get discussed, though, is WHY so much regulation generates complaint. Let me suggest a reason that is not ideological:

Our regulatory agencies, legally required to ensure fair comment and to provide credible studies of environmental and economic impact, now enact regulations only after a grueling and lengthy period of gestation. Once the regulation becomes final, nobody wants to go through that horrific process to make "minor" adjustments. As a result, as encumberments of the rule making process have proliferated, regulations have become rigid and too often ill-suited to a rapidly changing business environment.

There does exist a solution: the common law. The common law is a regulatory process based on brief, general regulations like the antitrust laws that inherently provides flexibility, in that judges can and do take account of changing circumstances and theories, and allow for rational and fair exceptions. Not every regulation would be improved by such a process, but many probably would be.

In this approach, agencies promulgating regulations would be allowed to write short, simple rules that set out the general idea and purpose, implementing them through case by case applications.  Business would benefit in several ways. First, the thicket of regulation would be sharply cut back. Second, the regulation could be tailored to the precise circumstances of the business in question. Third, as a body of rulings developed, caselaw would provide, based on practical experience, the details that are necessary to guide business decisions. Fourth, this approach would generate far more caselaw than the present approach, providing a much richer, more complete set of guidelines. Two other possible benefits: first, this approach would greatly simplify regulation in general; second, it might also greatly reduce the requirements for providing information, while requiring the relevant information to be provided in particular enforcement actions or for particular regulatory informational purposes.