Accidental Perverse Incentives

Many government regulations are set up by smart people with the best of intentions. Government regulations are an extraordinarily powerful tool and quite frequently the results of those regulations are the opposite of what people had originally intended. A few examples:

  • National parks were originally set up to be “pleasuring grounds” – areas all Americans to recreate and enjoy. This worked well at first, with many parks having roads and lodges and campsites and trails built.  Over time though, park rangers grew to resent visitors (probably due to some obnoxious Karen types) and began to push back. The park rangers have more power than ordinary American citizens and have over the last thirty years severely restricted access to the parks by focusing on “preservation”. Many camp sites, lodges, roads, and trails have now been closed.
  • Historical buildings have now been protected by law… and the law says these buildings cannot be altered in any way and must be maintained, making them a financial nightmare for the owners. The outcome is that beautiful, architecturally significant old buildings that MAY be put on the historical register are now torn down ahead of any such designation.
  • Fossil discoveries are super important for humanity to understand the history of our world, but discovering a fossil during construction now means that your project and land may be permanently shut down. The incentive to an owner now is to destroy or hide the fossil quickly so work can continue.
  • The Environmental Protection Agency was set up to prevent unnecessary abuses of the environment we all share. It did great at first – simple changes to factories and automobiles were able to greatly reduce air pollution. Every organization starts with a mission, turns into a business, then becomes a racket. Now it is a racket that is used by major manufacturers to prevent competition – it costs millions of dollars in testing to get a new engine idea on the road. It also is used by a few environmental extremists to do things like ban internal combustion engines altogether on the west coast by 2030… even though we still have no proven replacements (and electric cars batteries and energy are made using worse environment abuses than oil… just this is generally pushed overseas where the bureaucrat doesn’t think about it even though it impacts all of us in the long run.

Government regulations certainly have their place, but they are such a huge and unwieldy tool that it is best to avoid them unless absolutely necessary. And even then, there needs to be sunset provisions to avoid regulatory capture or the bureaucrats taking over as their own self-interested force.

Published by

Joel Gross

Joel Gross is the CEO of Coalition Technologies.