Regulation, the Constitution, and the Economy: The Regulatory Road to Serfdom
by James Rolph Edwards
University Press of America 1998 256 pages $52.00 cloth; $32.50 paperback
Reviewed by M. Royce Van Tassell
James Rolph Edwards invokes a Hayekian legacy in the title of his book, Regulation, the Constitution, and the Economy: The Regulatory Road to Serfdom. In light of Hayek's belief that freedom cannot endure unless every generation restates and reemphasizes its value, this book is quite timely The message is not new, but it is certainly one that needs to be stressed again and again.
Edwards, professor of economics at Montana State University-Northern, examines regulation from three perspectives: historical, constitutional, and economic. The commandand-control mechanisms of the modern welfare state, he observes, are not modern innovations, but musty relics mirroring the authoritarian, mercantilist policies of bygone centuries. In the social evolution from relationships based on status to relationships based on contract, regulatory agencies are an about-face.
Furthermore, by combining legislative, executive, and judicial powers, regulatory agencies obliterate the constitutional system of checks and balances. Even some so-called liberals are now starting to see the dangers in permitting so much power in one place.
From an economic perspective, regulation often cartelizes industries and stifles competition, thereby artificially raising prices above what would prevail in a competitive market. Far from helping consumers, as widely believed, regulation benefits interest groups that know how to manipulate the political process.
Summarizing the literature on regulation, Edwards exposes both the inefficiency and immorality of modern regulatory agencies like the National Labor Relations Board, the Food and Drug Administration, National Highway Traffic Safety Administration, and Occupational Safety and Health Administration. Edwards asserts that the ideologues staffing these agencies "wish to exercise coercive power over others, either because that is what they enjoy or from [an] egotistical belief that others are too stupid or immoral to be left free."
On the basis of his historical, political, and economic analyses, Edwards explains why the nature of the federal government changed so dramatically between 1870 and 1937. He maintains that "government growth in America has been related to episodic crises." Robert Higgs has made that point about the consequences of both world wars. Edwards argues, however, that these changes are the outcome of more fundamental changes that followed the Civil War, …