An Addiction to Regulation

It hardly takes a D.Phil in economics to realise that many regulations can be harmful to business and free trade, particularly small enterprise. Philip Greenspun, who runs a single-man helicopter company – has a brilliant example of how absurd the government web of rules and directives has become:

I’m subject to the same drug testing requirements as United Airlines. I am the drug testing coordinator for our company, so I am responsible for scheduling drug tests and surprising employees when it is their turn to be tested. As it happens, I’m also the only “safety-sensitive employee” subject to drug testing, so basically I’m responsible for periodically surprising myself with a random drug test. As a supervisor, I need to take training so that I can recognize when an employee is on drugs. But I’m also the only employee, so really this is training so that I can figure out if I myself am on drugs. As an employee, I need to take a second training course so that I learn about all of the ways that my employer might surprise me with a random drug test and find out about drug use. But I’m also the employer so really I’m learning about how I might trap myself. 


2 responses to “An Addiction to Regulation”

  1. Sean Archer says :

    While I don’t understand the regulations being discussed, and yes over-regulation can be a problem, quoting someone else’s interpretation without investigating it can be difficult.

    Looks like an American example, and I understand US regulations not at all. However, I know in the UK our regulations tend to be high on the intention, but less so on the actual “how to do so”.

    I would doubt, without studying the legislation, that it goes so far as Mr Greenspun is suggesting. A rounded legislation would account for something along the lines of “the corporation must take all necessary precautions to ensure pilots do not take to the air while under the influence of mind altering substances” or some such. In general the laws (in the industry I’m in, in the UK) do not state the specifics as to how this is achieved, just that it must be done.

    By not setting down specifics this leaves the companies involved to decide how best to deal with it, and if there is a breach in the regulations leaves them open to prosecution. This is based on the fact that they cannot say “this is what you told us to do”, and is based entirely on a subjective review of the controls the operator had in place.

    The example you provided, without a knowledge of the aviation industry in the US, seems more likely to be the interpretation of the rules by Mr Greenspun, or (more likely) his lawyers who are very anti-risk.

    • Adam Baxter says :


      With regards to this particular example, I do not doubt that to an extent the apparent excesses of the regulation regarding drug testing may be down to Mr Greenspun’s interpretation. It is worth pointing out, though, that it wasn’t intended as a serious critique of regulation, more something of a light-hearted illustration of the affect intervention can have. Having said that, I do happen to believe that there is a compelling case to be made in favour of the view that the state frequently (and indeed has incentives to) over-regulate or regulate badly (for various reasons, including information asymmetries), something which I’ll address in another post, no doubt.

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