Freedom and regulation

Sarbanes-Oxley and the ADA may be bad policy. But they don’t make the country “less free.”

Yesterday’s post on the tendentious definition of “economic freedom” embodied in the WSJ/Heritage rankings and similar right-wing documents attracted several thoughtful emails (and of course several less thoughtful ones).

Most of the comments consisted of arguments that one or more of the measures counted by the WSJ/Heritage project as making the United States “less free” were in fact costly, inefficient, or plain bad policy, either in general or in some specific application. That may well be true.

I wrote without prejudice to the question of whether Sarbanes-Oxley or the other laws mentioned are good or bad policy. My objection is to calling the absence of regulation “economic freedom,” and to the use of the word “freedom” as a thought- substitute generally.

Several readers pointed out that Sarbanes-Oxley, though its goal is preventing fraud, imposes substantial burdens on companies. I find that easy to believe. Maybe those burdens are greater than any resulting gain in corporate honesty; if so, the law should be changed or repealed. But that doesn’t justify saying that the law makes the country “less free.” (I plead guilty to hyperbole in discussing Sarbanes-Oxley as if only those intending to steal might suffer from it.)

Other readers point out that ADA, drug labeling, etc., can all impose costs, and in some cases may be bad policy. That’s also true, and also not the same as unfreedom.

Take the ADA, for example. A reader who works for a major university points out that his employer spends about $5 million a year retrofitting old buildings to make them accessible. He doubts that’s money well spent. Maybe it isn’t. Maybe it’s inefficient. Maybe there’s another way of spending that $5 million that would do more for the disabled.

But ADA doesn’t make the United States “less free,” because “freedom” and “regulation” are not in fact antonyms. It makes the university less free to block access to its buildings to disabled students and employees, and it makes disabled students and employees more free to study or work at the university.

Similarly, the ban on restrictive covenants made bigoted whites and Christians less free to keep blacks and Jews out of their neighborhoods, while making blacks and Jews more free to buy real estate.

By the WSJ/Heritage standard, the ban on restrictive covenants made the country “less economically free.” Moreover, the ban was imposed entirely from the bench, without any democratic accountabilty whatever, thus making it an instance of the dreaded “judicial activism.” Not only that: the ban was made retroactive to covenants already in force, thus voiding innumerable contacts entered into in good faith between consenting parties, a clear violation of property rights and the rule of law.

The ban on restrictive covenants doesn’t enter into the current Heritage/WSJ rankings. But that doesn’t reflect any difference in principle between that ruling and the laws the authors of that document still claim make us “less free,” merely their political sense of what they can, and can’t, get away with.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: