In recent years, the amount of technology in the economy has advanced at an unprecedented rate. With this growth, innovative automation has also increased through the use of technologies such as robots and artificial intelligence. In the wake of such technological growth, many have sounded the alarm that there is a threat to employment growth, but are such claims well-founded?
Centered around the debate about technology and job losses is the question of whether or not technology causes permanent job losses that cannot be recovered. It goes without saying that when old technologies are overtaken the specific jobs for that technology decrease in demand. For example, cars caused horse carriage drivers to not be in demand as much as they used to be. The real question is whether or not those new technologies replace old jobs without creating new jobs.
A misunderstanding of the benefits of new technology as a way to actually expand jobs and wage growth can have real effects. This false perspective has gone so far that some have even proposed that the government levy extra taxes on automation technology, such as robots. Proponents of this “robot tax” argue that if a robot produces income that an individual might have produced, then the government should tax the robot’s “income” to make up for the lost tax revenue.
Rather than viewing technology through the lens of big government, one of the most effective ways to understand the positive effect of future technologies is to look back on the technologies of the past. Around 1810, in the wake of the Industrial Revolution, some workers openly opposed the integration of machinery into trades that had been traditionally done by manual labor. The protesters became known as Luddites, with many of them resorting to the open destruction of machinery.
But time would show that the Luddites had been misplaced. In the decades that followed, the standard of living began to improve as the ability to produce goods and services became more affordable. This meant that while basic implements such as clothing and utensils were often expensive for the average family to afford in prior days, machinery enabled the mass production that made these things within the average family's reach. In addition, to basic living standards increasing, new technology brought about an overall increase in the amount of available goods and services.
These lessons from history stand true today. The average worker has a far a higher standard of living than former days and and can use technology to generate more value than the average worker of prior days. For instance, the industrialization of farming has drastically increased the amount of profits that the average farmer can produce per acre. A manufacturing worker can oversee millions of dollars in daily production from a computer dashboard. Data system administrators can oversee millions of financial transactions in a day.
All of these factors mean that individual workers are able to bring more value to companies by harnessing the power of new technology. When the average worker is able to bring higher value and profits for companies, there is a cascading effect that ultimately allows companies to expand and have more openings for employment.
Free market innovation is a catalyst for true growth, and technological advancement is a key way to make that happen. Therefore, rather than imposing excessive regulations and even considering counterproductive policies such as a “robot tax,” government should realize and support the employment potential that comes with technological growth.
1970’s Santa Clause is Comin to Town is one of Rankin/Bass’ most popular stop-motion animated programs. The holiday classic, based on the song of the same name, tells the story of how Santa Clause came to be. To lovers of liberty, it also serves as an allegory for free markets and how prohibition and tyrannical laws only lead to worse outcomes.
Santa Clause is Comin’ to Town casts its title character as an idealist, an individualist who detests nonsensical regulatory laws and fights against them, all whilst spreading Christmas cheer. The tyranny begins when Sombertown’s governor, the Burgermeister Meisterburger seeks to ban all toys after he trips over one and breaks his leg.
Does this not seem familiar to when we hear left-wing activists nowadays seeking to ban anything they deem “dangerous?” – guns, toy guns (ironically), fast food advertisements, fossil fuel-powered cars, pets, “violent” video games (more toys), and free speech, among other seemingly harmless things. The thing is, we continue to attempt to ban things when we know that doesn’t work. By nature, people will do what authority tells them not to. Outlawing something that we do not understand, fear, or do not like does not work and is simply unjust. To decide what’s good and not good for an individual without their consent is an infringement on self-governance completely. The most prevalent example of this is the prohibition of alcohol, which we know only made matters worse – crime, addiction, corruption, etc.
Santa sees the injustice happening in Sombertown and dares to defy the governor’s orders. When he finally makes the perilous journey into the village, he opens his sack of toys, and happy children commence to playing with them.
Infuriated, Meisterburger orders the arrest of the children, but Santa intervenes and offers him a yo-yo. It immediately improves the governor’s sour disposition, until one of his officers reminds him that he's breaking his own law. Thankfully though, the distraction allows Santa to escape arrest.
Santa later launches a guerrilla campaign to smuggle toys into Sombertown. He adopts the conventions that we now associate with the Legend of St. Nick — arriving under cover, entering homes through unconventional means, planting toys in wet socks hung by the fire — to meet the demand for toys while avoiding law enforcement.
The governor’s men then adopt more aggressive tactics like unreasonable searches and seizures, as well as subjecting violators to excessive punishments, though we’re told the tyrant(s) eventually died off and were replaced by better men. “By and by,” the narrator says, “the good people realized how silly their laws were,” and Santa's story goes worldwide. He no longer is considered an outlaw, but a saint. He grows older, but continues an annual ride across the planet, delivering gifts to all the well-behaved boys and girls.
It's an unconventional happy ending, and a silly allegory, but one that resonates with those who favor limited government. Unjust laws are finally repealed with the help of a brave individualist and freedom reigns. If there is some lesson to be learned, it’s that the prohibition of anything could result in many worse outcomes – crime, corruption, and increased government control over average citizens’ lives. If the adults don’t get anything out of this animated classic, hopefully, the kids will.
Agriculture is a growing industry. In a day when the nation has now has the ability to produce more agricultural products than prior generations, it has become apparent that agriculture is an industry where innovative business models and technologies have extraordinary potential. Despite this success, there has been a growth in regulations that inhibit this innovation.
According to the United States Department of Agriculture (USDA), the nation’s agricultural per-capita production has increased by almost 300 percent since 1948. While there was relatively little change in the inputs, the growth compounded. What is the cause of this? Studies by the USDA found that much of this growth was driven by the adoption of innovative business models and new technologies.
- Excessive regulation statistically affects agricultural innovation
While innovations in technology and business carry a directly positive effect for agricultural growth, there is an opposite effect when regulations increase. Ultimately, there are two main jurisdictions for agricultural regulation, the state government and the federal government.
A Purdue University analysis of the agricultural regulations imposed on the federal level from 1997 to 2012 by the Environmental Protection Agency (EPA) and the USDA found that the regulations had a substantial impact on innovative growth in productivity. Because of USDA regulations, the study found a 24.7 percent decrease in productivity growth, for EPA regulations, the study found a 36.8 percent decrease in productivity growth.
Despite such dismal effects of regulation on growth, federal agricultural regulation has only increased since the Purdue study’s 2012 end year. A 2018 study conducted by the George Washington University Regulatory Studies Center, and again, the USDA itself, had similar findings. Stating that “growth in total regulatory restrictions has a negative relationship with growth in crop yield.” This federal environment has led to calls from groups such as the American Farm Bureau Federation for a decrease in these excessive regulations, citing a fundamental issue with the extent and enforcement of federal agricultural regulations.
While state-level regulations have varied across the nation, these state-level regulations can inhibit agricultural innovation and growth as well. The extent and enforcement of agricultural regulation is different in every state, but examples of regulatory burdens on agriculture abound. This is true both for innovative agricultural technology and innovative agricultural business models.
On the innovative technology side, California law requires all self-driving tractors to have an operator stationed in the vehicle, practically defeating the purpose of “driverless” tractors. In Mississippi, drone operators seeking to spray pesticide or fertilizer would have to get an airplane pilot’s license. This is due to an outdated requirement that all aerial applicators have a pilot’s license. Both of these rules are based on outdated laws from the 1970s, and these regulations are only two such examples of burdens that states have placed on agricultural technology.
In addition to regulations on ag-tech, many states also have regulatory burdens on innovative agri-business models as well. For several years, multiple states did not permit farmers to sell shares of their dairy herds to outside participants. In addition, several states have prohibited certain farm-to-consumer food sales from being marketed on social media, forcing many farmers to be excluded from a basic tool that other sectors are permitted to use widely.
- Key reforms could help remove barriers to growth
Even a brief survey of the agricultural landscape demonstrates a need for meaningful regulatory reforms. Farmers across the state and country have recently battled economic downturns, natural disasters, a global pandemic, and numerous other challenges. The least that the government can do is remove regulations that inhibit their productivity and innovation. While there is a myriad of agricultural regulations that should be fundamentally repealed on the state and federal level, there are also proactive reforms that could help maintain an environment that encourages growth.
With the backing of farmers and groups such as the American Legislative Exchange Council (ALEC), many states have enacted sweeping agricultural freedom laws that have expanded access to agricultural products by consumers. Given that a large percentage of the agricultural sector centers around food production, several states looking to cut regulations have enacted “Food Freedom” laws. Many of these laws encompass reforms such as expanding farm-to-table meat sales, broadening cottage food sales, and lowering small farmers' licensing and permit requirements.
In addition to specific changes to the most commonly burdensome regulations, there is also immense potential in a regulatory exemption program. In such a program, individual farmers could request specific exemptions from excessive agricultural regulations that do not affect health or safety. In some cases, a broad regulatory repeal like the food freedom laws may not apply to a farmer in a unique regulatory situation.
Using such exemption programs, individual states, and even the federal government, could have platforms for farmers to continue operating and growing in the economy without being hamstrung by a one-size-fits-all approach. This “regulatory sandbox” model has a successful track record of success in other sectors, such as financial technology, and it could be a platform for farmers in unique scenarios to get the regulatory relief they need.
- It’s time to let farmers work without limits
The outdated rules of yesterday, and arbitrary regulations of today, shouldn’t be permitted to restrict the growth of agricultural innovation and prosperity for the future. A proactive agricultural sector can only grow to its fullest potential in a free market context.
Farmers have enough challenges to face as they strive to produce products for their families, neighbors, and country. Instead of placing more burdens on these hardworking folks, sound public policy should ensure that farmers can continue to grow and innovate without having the blight of a heavy-handed government.
The Christmas season represents a major source of cultural optimism that encourages people to spend more freely, sparking quick and, at times, unsustainable economic vitality. While this usually provides a boom, economic circumstances aggravated by government actions could mean a leaner holiday for thousands of Americans.
Due to current economic hardships like inflation, the consumer price index reported that the price for goods and services have increased 6.2 percent over the last year (that number increased by 0.9 in the last month alone). Things are getting more expensive and under normal circumstances, people would be much less likely to consume more expensive items beyond what they need to buy out of necessity. Additionally, supply chain problems have led to a shortage of items one can buy. Meanwhile, the federal government of 2021 had a consistent pattern of policies that discouraged labor participation and increased monetary inflation.
However, despite economic challenges, consumer spending still occurs. This should not be surprising as the Christmas season generally represents a period in which people are not as concerned about the price tag. The data shows that even though holiday spending is less than previous years, people are still spending more than they typically do in other parts of the year.
This should be encouraged. Regardless of what economic theory you hold, consumer demand and spending are an essential part of boosting the economy. Even in the supply-side framework, cutting taxes for businesses to create jobs only works if those businesses have a demand for their product. The biggest problem that stands in the way is if companies can keep up with the demand when they themselves are running into a supply shortage. The ultimate solution to this is having the government come alongside businesses and help them make it easier to make goods by cutting red tape.
Mississippi is far from avoiding this problem during the Christmas season. Gas, food, and other consumer products are rising making it more difficult to travel and celebrate. Cultural optimism certainly helps with the state’s ability to maintain the economy. However, the true and sustainable solution to promote a healthy economy is by continuing to promote the free exchange of goods and services. Mississippi has already taken a step in testing this by creating a tax free holiday in the month of July. However, it can take further steps in promoting free market principles this holiday season by simply allowing companies to operate freely and becoming a help, rather than a hinderance, to them.
Ultimately, both businesses and consumers should be free to pursue what is most prudent for their interests. One of the greatest myths people believe regarding the economy is that simply because the nation is entering into economic hardships does not mean that government intervention is warranted.
This Christmas season may exhibit a time in which people will sacrifice, spend, and travel less, but that conclusion must be made by the consumers themselves, rather than government policymakers. As we enter the Christmas season, the choices of the people, rather than the government’s central planners and regulators, should be at the forefront.
It is a basic economic principle that when taxpayer dollars are injected into a sector of the economy, there is an imbalance in the free-market forces of competition and supply that help keep prices low and quality high. This shows true as the growing government has contributed to the problem of increased costs for health and higher-education.
In order to understand the context of rising education and healthcare costs, it is important first to consider the extent of these rising costs. Rather than being isolated incidences, higher education and healthcare have seen a consistent pattern of cost increase.
The American Enterprise Institute looked at the history of costs for multiple sectors using the Consumer Price Index from 2000 to 2020. The analysis attempted to consider the top cost increases in light of inflation and other factors. The report found that while overall inflation led to a 60 percent increase in costs, college tuition and fees increased by over 170 percent. Meanwhile, hospital costs increased by over 200 percent.
The increases in higher education costs tie directly into the amount of government funding that has flowed into the higher education system. According to U.S. News and World Report, the average in-state tuition at national universities was $5,775 in 2002 (adjusted for inflation to 2021 dollars). In 2021, the average in-state tuition was estimated at $11,631. So, in simple terms, college tuition has more than doubled.
Such increases are not isolated to the last 20 years either. Over 30 years ago, in 1987, some were already sounding the alarm that expanded government involvement in higher education brought about in the 1970s was causing tuition increases. Many universities jumped at the chance for more government dollars through grants and “subsidized” loans. Such circumstances eventually led the Federal Reserve to conclude in 2017 that every dollar of student aid would ultimately lead to an average tuition increase of 60 cents. This trend has continued to hold true. While college tuition slightly decreased in the wake of Covid, the long-term increased student and government debt and higher long-term tuition costs will likely be felt for years to come.
The same principle of harmful government intervention applies to much of the government’s health care funding as well. In 1970, the average American had $1,848 (in 2019 dollars, adjusted for inflation) in annual healthcare costs. By 2019, the annual healthcare cost per person had risen to $11,582. This reflects a six-fold increase. Granted, the factors that tie into healthcare costs and increases are complex and numerous. But a review of the impact of government healthcare spending demonstrates a real impact that affected Americans across the country.
For instance, according to the Heritage Foundation, the Affordable Care Act more than doubled the cost of health insurance in the individual market from 2013-2019. This was no less true in Mississippi. Average monthly premiums increased by 149 percent, from $214 to $532, reflecting an annual increase of $3,816. Citizens could be using such funds to put in savings, invest in the economy, or simply increase their quality of life. Instead, they have to put that income towards healthcare.
While the advocates of big government often make politically driven promises of “free” education and “free” healthcare, history and current experience continue to undermine such claims. Sure, some may perceive the government paying for higher education and healthcare as a way to help citizens save money. But the increases in cost caused by these “free” programs make the government’s “free” money a little better than just a high-interest loan -only in this case, payback comes in the form of higher costs for everyone.
Free market economics and common-sense mathematics reject the concept of government inflating healthcare and education by its false promises of “free” funding. If someone gave Johnny $10,000 to use towards his college or healthcare, and it caused all the hospitals and schools to raise their costs by at least $10,000 in response, then that wouldn’t truly be “free money.” Yet somehow, the lessons of this basic scenario are discounted if the giver’s name happens to be Uncle Sam and, worse, if the “giver” got the funds by taxation from others rather than his own benevolence. As demonstrated by healthcare and higher education, this scenario has played out in the real world.
Government funds always carry a price tag that usually begins and ends with the wallets of the taxpayers. As Americans watch the increase in healthcare and education costs, they might do well to recall that the promises of “free” money from gushing politicians have seldom stood the test of time. Rather than going back to the failed model of redistributing wealth, government policy should return to the free-market principles that have a track record of prosperity.
Mississippi has a challenge in front of them as it continues to address the economic problems that face our nation. One factor that needs to be addressed in this complex issue is the number of regulations within the state. As an underlying cause of these regulatory excesses, the state has dozens of regulatory boards and agencies, with many barely even cataloged by the state government itself.
The number of regulatory boards has become bloated to the point that it is hard to keep track of what board oversees what regulation. To date, there is not even a comprehensive list of all the agencies, boards, and commissions that exist within the state.
Ultimately this reflects on government inefficiency and excessive control of the economy. Given the right context and purpose, regulations can serve as a helpful tool in ensuring fair and open competition. Now, however, regulations are often used as a political weapon to stomp out competition and economic progress. The proliferation of new rules, boards, and agencies is commonplace. In fact, this is so much the case that the legislature has no standardized system in place to notify stakeholders in government and the populace when a board is created or repealed.
Having so many regulatory boards has practical consequences. In 2018, the George Mason Mercatus Center and the MCPP reported a snapshot of Mississippi’s current regulatory scheme. We found that Mississippi’s Administrative Code is far more expansive in terms of regulations than it needs to be. In fact, it totals 117,558 restrictions, is comprised of 9.3 million words, and if you sat down and read it, it would take 13 weeks to read!
This does not necessarily mean regulations do not have their place. Regulations are, after all, enumerated powers given to state legislatures as a tool to govern. However, such power must come with limits. For one, overregulation stifles innovation and economic growth, a necessary component to society, especially during these times. As Broughel notes, such a system of regulations, over time, has a detrimental impact on the economy. In fact, if a cap on regulations was established and the state simply kept that number for a couple of years, the economy could grow substantially.
On another note, overregulation places a greater burden on the government to ensure that various provisions are met. When a government grows, it becomes harder to manage it efficiently. The net result is an economy that is snuffled out by too much oversight and a government that is overwhelmed with too many rules and regulators to keep track of.
If Mississippi desires to become a top state that provides incentives for families and businesses to come and settle there, the state has to get a handle on its regulatory schemes. In previous legislative sessions, policies have been proposed to do just that. However, there have not been enough significant policy reforms that would manage this problem effectively. As we move into the next legislative session, it should be a top priority to lessen the state government's hold on the economy by diminishing the extensive nature of its state regulations. While the government uses regulations as a context to insist that the people are accountable to its authority, how can the people themselves hold the government accountable if the state itself does not even know how many regulators there are? Rather than having a system that lacks accountability and burdens its people, the Magnolia State needs a regulatory overhaul. Meaningful reforms would ensure that every regulation serves a legitimate purpose and that every regulatory authority has transparency before the people it serves. It’s time for Mississippi to move forward.
When government overreach and excessive regulation occur, minorities often bear an extra burden. While Mississippi has a myriad of overbearing regulations, excessive healthcare regulations are potentially the most damaging. Indeed, Mississippi’s burdensome healthcare regulations have contributed to certain minorities having healthcare gaps.
According to the United States Census Bureau, 41 percent of those in the Mississippi population are a minority, consisting mostly of African Americans. This is one of the highest minority percentages in the country.
Ultimately, the state of Mississippi has a crisis of healthcare access that goes across all ethnicities. However, due to the geographic nature of healthcare access problems, healthcare access challenges in certain areas with a higher percentage of African Americans can lead to heightened challenges for the minority population as a whole.
There are several contributing factors to the reduced minority healthcare access in Mississippi. While the regulatory excesses on healthcare in the state have several variations, perhaps the most burdensome is the state’s Certificate of Need (CON) laws. Under CON laws, new healthcare providers must get permission from the state before beginning operations in a specific region. Additionally, the laws allow existing providers in the region to give input on whether not the new provider is needed.
While CON laws are problematic no matter where they are, these laws' effects on healthcare access are especially strong in rural areas. Fundamentally, rural health care systems are generally more sensitive to bad health care policy than their urban counterparts, and CON laws have an especially strong effect. According to research by the Mercatus Center at George Mason University, CON laws reduce the number of healthcare providers, increase the cost of healthcare in rural areas, and ultimately lead to lower health outcomes.
Mississippi has the highest percentage of rural African Americans in the country. Thirty-eight percent of the rural population is black. When placed in the context of CON laws, it is worth noting that the state has among the worst health outcomes for blacks in the country. In many states, the majority of the black population is urban-based and experiences a lesser impact than CON laws' effects on blacks in rural areas. Meanwhile, African Americans in Mississippi bear the heightened effect of CON laws on rural areas.
Additionally, the inherent concept behind CON laws places minorities at a disadvantage. CON laws grant approval for a new healthcare provider to open up only if the state determines that the population at large needs a particular healthcare service. However, the central planners behind CON implementation often fail to account for other factors, such as the positive benefits of increased competition for minorities.
To illustrate this, it is helpful to look at a study conducted by Rutgers University. In the wake of CON repeals in New Jersey, the study found that certain cardiovascular procedures saw an increase in “utilization overall and did so more rapidly for blacks.” This was due to the fact that increased competition from new providers led to more providers working with minority populations that were outside of their traditional patients.
CON regulations on healthcare provider expansion might help protect incumbent providers from new competition, but they do little to help everyday Mississippians. If Mississippi wants to see the void of healthcare providers in the state filled, a key step is to remove this red tape that inhibits its citizens, rural areas, and minority communities. Government control and central planning of the health sector is a recipe for deprivation, it’s time for Mississippi to turn the tide.
Precious metals like gold and silver have an interesting relationship with state economies and currencies. While the federal government has moved away from precious metals in favor of fiat currency, some state governments have also put policies in place that discourage gold and silver investment. Unfortunately, Mississippi is no exception.
Traditionally, currencies were managed on a fixed basis, meaning that governments print and distribute money based on the amount of gold and silver that is available. However, as time has moved on, these standards have been neglected and governments now operate on a more “flexible” monetary system. This means that the federal government can print money at its discretion. The problem is that the more the government prints, the less valuable American currency becomes, which causes serious economic problems like inflation.
It is no secret that the nation is suffering a crisis of inflation currently. This is due to a variety of reason that can be found elsewhere. However, state responses to this problem have started going in the right direction as governments begin to release controls like taxation on precious metals. The reason why this is a good thing is because, while precious metals are also good used for trade, it is effectually a currency. When states tax the sale of precious metals it is essentially taxing money itself. It simply does not make sense and is akin to going to the grocery store and being charged a tax for breaking out a five-dollar bill. This causes individuals to not engage in the precious metals market and distances the economy even more from a grounded monetary system.
A couple of days ago, the Money Metals Exchange and Sound Money Defense League released an index ranking the states on their precious metal policies. Each state is evaluated based on 12-criteria system that primarily examines whether states levy a sales tax against precious coins and bullion. On this point system, Mississippi ranked one of the lowest (7th worst) overall. This indicates a specific problem that can be remedied within the state by removing government taxation on precious metals.
As it stands, Ohio is the only state that has establish policies allocating a percentage of state-held pension funds to physical gold. Additionally, the majority of states throughout the country have either significantly decreased or removed altogether sales taxes on precious metals altogether. This is a good policy in returning to an economy that is grounded in something fixed. This is achieved by treating things like precious metals as distinct from the rest of the economy.
Mississippi is one of only nine states that imposes sales tax on precious metals, thus, it levies a 7% tax on gold and silver purchases. However, it is currently part of a group of states that are considering lessening or removing the sales tax on gold and silver. In the 2021 legislative session, a bill was introduced that would have repealed the sales tax on gold, silver, platinum and palladium bullion. However, the bill died in committee.
Repealing the sales tax on precious would be a good change for the economy. Prices for precious metals, and the inflation rate that comes along with them, should be able to fluctuate naturally without states artificially interfering. This is the essence of how free market economies are supposed to operate.
Friendly precious metal polices on the state level could lessen the burden for individuals like investors engaging in the market and including physical metals as part of their portfolios. Such reforms could also help citizens seeking to protect their savings and retirement from the erosion of inflation.
As Ron Paul describes it when he testified before the Arizona Senate Committee when it considered gold and silver monetary reform: “It makes no sense to tax money.” Mississippi should follow this commonsense principle and remove taxation on precious metals.
It is fairly common knowledge that many regulatory policies are arbitrarily instituted and enforced. While the existence of burdensome regulations is fairly well recognized, the specifics of just how excessive certain regulations can be is worth noting. This is especially true for new technologies and businesses that threaten entrenched interests.
At face value, the stated purpose of most regulations is to prevent some kind of harm. However, the question itself really hinges upon how regulators define the term harm. Some regulations do have a genuine intent against preventing actual harm, such as the widespread ban against driving while intoxicated. But unfortunately, the history of regulatory policy has a long history of excessive and even laughable rules.
While regulatory excesses have come in all sorts of contexts, there is a historical trend of new technologies often receiving the special ire of regulators. For instance, in the early 1900s, the advent of “horseless carriages” (better known today as cars) led to calls from some that all cars be required to follow rules that would be considered laughable today.
One such rule read: “automobiles traveling on country roads at night must send up a rocket every mile, then wait ten minutes for the road to clear. The driver may then proceed, with caution, blowing his horn and shooting off Roman candles, as before.” In addition, the proposed rules also required that cars change their paint colors every season to blend in with the scenery and not scare horses. While such rules seem comical at best in our modern context, the Pennsylvania state legislature approved the rules. The rules would have become settled law if the governor had not had enough common sense to veto them. If these rules had been enacted, there is little chance that the high speed interstates and highways of today could have become a reality.
Also in the early 1900s, the new technology of electricity had just started to become mainstream. Thomas Edison invented a form of electrical transmission to power his lightbulbs that became known as Direct Current (DC). Meanwhile, his rival, Nicholas Tesla, had developed an alternative type of current. This current was more effective at carrying electricity at long distances that became known as Alternating Current (AC).
Thus began the “War of the Currents.” Outraged at the prospect of AC current threatening the patent royalties he received from the use of DC current, Edison began a campaign to place AC current under the condemnation of regulators. He used the powers of the mainstream newspaper media as a platform to spread a hysteria known as the “Electric Wire Panic.” He put on a series of public electrocutions of animals using AC. Edison even funded the invention of the first electric chair (using AC, of course) as another platform to place AC current in a bad light.
Edison got close to his goal of stoking enough public hysteria for regulators to ban AC current altogether, but he was never fully successful. In fact, AC current eventually won over the electric industry as a safer and more efficient current, causing Edison’s DC current to fall out of widespread use. Yet, the power of government regulation almost eliminated the technological innovation found in AC current that allowed for electricity to travel at high voltage for long distances.
Yet the excessive regulations of yesterday were not restricted to new technology alone. Much like today, businesses were restricted as well. For instance, from the 1860s to the 1920s, several states had restrictions on the ability of banks headquartered within a state to open multiple branches. In this way, expansion was impeded, and existing interests were protected from new competition. On the national level, banks that wanted to operate across multiple states had to go through an onerous process of state-by-state restrictions requiring specific government approval for expansion. In some states, national banks could not open branches at all.
Finally, with the passage of the McFadden Act in the 1920s, banks were able to have more freedom, and today we see banks freely operating across multiple states. Someone from Mississippi vacationing in Georgia can often find a branch of their home bank with little trouble. This might not be the case if regulations had not been repealed.
While it is easy to point fingers at the past, similar regulatory absurdities exist today as well. Modern examples abound, such as excessive regulations on Bitcoin transactions and the absurd Certificate of Need laws that require new health care providers to get permission from competitors. The error of excessive regulation is no less real in 2021 than it was in 1901 or 1921. Instead of protecting old technologies and entrenched business interests, policymakers should learn from the lessons of the past and ensure that illogical regulations are placed in the dust bin of history where they belong.