Henry Hazlitt, noted economist, author, editor, reviewer and columnist, Is well known to readers of the New York Times, Newsweek, The Freeman, Barron’s, Human Events and many others. The most recent of his numerous books Is The Inflation Crisis, and How to Resolve It.
All over the United States, if you are reading this in a daylight hour, there is a ceaseless downpour of new laws. Every day some of us, somewhere, are being encumbered or shackled by still more restrictions. There are just too many laws.
But how do we tell how many laws are too many, and which ones are pernicious?
Let us begin with some elementary considerations. A law may be defined as an edict which either forbids you to do something or compels you to do something. Sometimes, it is true, it may be merely a guiding rule which tells you how to do something, or defines procedures or standards, like weights and measures. But such standard-setting laws are few in number. Most laws are prohibitions or compulsions—in short, commands.
Why are laws necessary? They are necessary, first of all, to prevent people from injuring or aggressing against their neighbors; to prevent theft and fraud, vandalism and violence. On the more positive side, they are necessary to lay down rules of action, so that others may know what to expect of us and we of others, so that we may anticipate each other’s actions, keep out of each other’s way, and work and act so far as possible in cooperation and harmony.
In a modern society, the traffic laws epitomize law in general. When they instruct us to keep on the right side, to drive within a specified speed limit on a given street or highway, to stop at a red light, to signal our intended turns, they may seem to an impatient driver to be restricting his liberty, to be preventing him from getting to his destination in minimum time. But because these restrictions apply to everyone else, they are, if they are well-conceived, helping not only him but all of us to get to our multitudinous destinations in the minimum time in which this can be done smoothly and safely.
How many traffic laws do we need? That is a difficult question to answer numerically. A general traffic code need consist only of a few simple rules, but they could all, it would seem, easily be embodied in a single statute. In any case, if the government confined itself to enacting a code of laws simply intended to prevent mutual aggression and to maintain peace and order, it is hard to see how such a code would run into any great number of laws.
England In 1854
Now let us look at the situation we actually face. In order to get an adequate picture, let us begin by comparing it with the situation as it existed more than a century ago in, for example, England. Let us take the year 1854, when the British philosopher, Herbert Spencer, wrote an essay on "Overlegislation." Some of us are apt to assume that the mid-nineteenth century in England was perhaps the time and place when a great nation came nearest to a laissez-faire regime. Spencer did not find it so. He found the country buried under needless legislation, and piling up more. With the change of a few details, his essay sounds as if it were written yesterday:
"Take up a daily newspaper and you will probably find a leader exposing the corruption, negligence, or mismanagement of some State-department. Cast your eye down the next column, and it is not unlikely that you will read proposals for an extension of State supervision. . . . Thus, while every day chronicles a failure, there every day reappears the belief that it needs but an Act of Parliament and a staff of officers, to effect any end desired."
Spencer went on to refer to mid-nineteenth-century England’s "20,000 statutes, which it assumes all Englishmen to know, and which not one Englishman does know." He found officialdom systematically slow, stupid, extravagant, unadaptive, and corrupt; and yet given more and more duties to fulfill. Instead of being confined to its primary duty of protecting each individual against others, the State is asked in a hundred ways to protect each individual against himself—"against his own stupidity, his own idleness, his own improvidence, rashness, or other defect."
"It is in the very nature of things," he continued, "that an agency employed for two purposes must fulfill both imperfectly. . . . And if an institution undertakes, not two functions, but a score—if a government, whose office it is to defend citizens against aggressors, foreign and domestic, engages also to disseminate Christianity, to administer charity, to teach children their lessons, to adjust prices of food, to inspect coal mines, to regulate railways, to superintend housebuilding, to arrange cab-fares, to look into people’s stink-traps, to vaccinate their children, to send out emigrants, to prescribe hours of labor, to examine lodging-houses, to test the knowledge of mercantile captains, to provide public libraries, to read and authorize dramas, to inspect passenger-ships, to see that small dwellings are supplied with water, to regulate endless things from a banker’s issues down to the boat-fares on the Serpentine—is it not manifest that its primary duty must be ill discharged in proportion to the multiplicity of affairs it busies itself with?"
Let us now pass over a century and a quarter, and see how our situation today compares with England’s then.
It is the individual states that enact the laws that affect their citizens most often and most intimately in their daily living. A figure averaging the number of laws passed each year in each of the fifty states would be hard to compile on a continuing basis and perhaps mean less than particular examples. Let us take our two most populous states, New York and California. During 1975, 1976 and 1977, the New York state legislature passed, respectively, 870, 966 and 982 public laws. ("Private laws" are not included here, as these individually affect only a handful of people.) During these same three years the California state legislature passed 1280, 1487 and 1261 public laws.
Prohibitions or Rule-Changes
Now let us look at the implications of this. What does a new law do? It either puts a new prohibition or a new compulsion on each of us (or a large number of us), or it changes the rules under which we have hitherto been acting. So on the basis of these figures the citizens of individual states are being subjected to an average of about a thousand new prohibitions or rule-changes every year. No one is excused from not knowing what every one of these new laws commands. I leave it to the reader to picture what all this means in terms of human liberty.
But we have not even got to Federal laws. Supposedly, these are only needed to cover such matters as interstate commerce and are subject to severe limitations by the Constitution, so an innocent reader of that document might not see the need for many such laws. Though the Federal books were presumably blank when it started, the First Congress, which began on March 4, 1789, did not see the need for many Federal laws. It enacted only 94.
But then, as more and more laws were piled up, succeeding Congresses were convinced that more and more additional laws were necessary. The 85th Congress, which opened in January, 1957, enacted 1,009 laws; the 94th, which began in January, 1975, enacted 588. The ten Congresses during that period enacted an average of 735 laws each, which means an average of 367 new Federal laws a year—or one new law every day. The reader should be reminded that individually many of these laws ran to well over 100 pages each.
The mania for piling up additional laws—new compulsions or prohibitions or changes of the rules—seems to be endemic in our democratic process. Every two years, when a new Congress is chosen, the rival candidates are eager to convince the voters that they can shower more blessings upon them than their respective competitors. "There ought to be a law," they tell the voters, to forbid this or that, or to give you this or that. "If I am elected, I will intro-duce a bill"—to guarantee you this or that. So almost every Congressman introduces at least one bill with his name attached to it.
In the 94th Congress, which began in January, 1975, 3,899 bills were introduced in the Senate and 15,863 in the House—an average of 37 bills per member. These are by no means unusual figures. In the 93rd Congress, 4,260 bills were introduced in the Senate and 17,690 bills in the House. It is at least one stroke of luck for the country that only about one in every thirty or more such bills survives to enactment. But the individual Congressman who introduces it has made his point. He has "carried out his promise" to the voters.
It has been estimated that American legislative bodies ranging from city councils to Congress pass 150,000 new laws every year.’ This total does not mean too much, because only a small section of the total applies to the residents of any given town or state. But a very meaningful figure would be the total number of live laws that still do apply to American residents of any given city or state.
Since its beginning Congress has enacted more than 40,000 laws. It is a fair assumption that most of these are still operative in some form.
When we come to the individual states we get to some really formidable figures. For Connecticut I am officially informed that: "We do not have information on the ‘live’ laws now on the books, but it is our understanding that there are about 3,500,000 words in the eleven volumes of the General Statutes."2 The legislative authorities of California regret that so far as the number of "presently operative statutes" of that state are concerned, "no such enumeration is readily obtainable," though "most (but not all) enactments of the California legislature are codified in one of twenty-eight codes." And the Department of State of New York informs me that so far as the total of live laws on the state’s books are concerned, "unfortunately, we don’t have the answer to this question." So far as the "consolidated" (as distinguished from the "unconsolidated") laws are concerned, however, these can be found in "six volumes covering 6,891 pages." No one is allowed to plead ignorance of any of these state laws, of course, if he happens to violate one.
When we come to the number of town and city ordinances to which each of us is subject, it is difficult to say precisely what would be an average figure. But in Boston, for example, the Building Code alone contains about 500 pages; in addition, the City of Boston code consists of approximately 300 pages of ordinances and 300 pages of statutes. The Administrative Code of New York City consists of ten volumes running to a total of 8000 pages. There are also 23 thick volumes of ring binder notebooks containing the rules and regulations of city agencies published since 1967.
But on top of all of these laws—Federal, state, and local—is piled the greatest mountain of all—the endless orders, regulations and edicts issued by the Federal and state "independent agencies." There are eighty-nine separate Federal independent agencies listed in the Congressional Directory for 1977. These are in addition to the innumerable commissions, "offices," "services," and "administrations" listed under the twelve cabinet departments. As long ago as 1954 the Hoover Commission found that the Federal government embraced no fewer than 2,133 different functioning agencies, bureaus, departments, and divisions. And practically all of them were running "programs."
It was ten years ago that Delaware Congressman William V. Roth and his staff made an eight-month statistical study and came up with the finding that "no one, anywhere, knows exactly how many Federal programs there are"—or who is spending how much on what. According to the 1968 Roth study, the Federal government at that time had 1,571 identifiable programs. Questionnaires sent to various agencies drew spotty responses. Inquiries were made as to the purpose of some 478 programs in Health, Education and Welfare; only 21 responded.
In August 1978, Congressman Gene Taylor from Missouri, going through stacks of the Code of Federal Regulations, found that the Code ran to 19,789 pages in 1938, to 20,643 in 1958, to 73,149 in 1976, and calculated it would top 120,000 pages by the end of 1978.
Adding the Costs
How can we add up the countless costs, penalties, discouragements, delays, hazards, impediments, obstructions, that these orders place in the way of production and commerce?
Even if we give up the futile attempt to add up the government regulations numerically, we can still point to some of the costs and hardships that they impose on the taxpayer, the motorist, the businessman, the homeowner, the consumer, the worker, the investor, and the nation as a whole. In the July Tax Review of 1978, published by the Tax Foundation of New York,
Murray L. Weidenbaum, a former Assistant Secretary of the Treasury, has detailed some of these costs:
- The outlays of 41 regulatory agencies are estimated to have increased from $2.2 billion in the fiscal year 1974 to $4.8 billion in fiscal 1979, a growth of 115 per cent over the five-year period.
- Federally mandated safety and environmental features increased the price of the average passenger automobile by $666 in 1978.
- There are over 4,400 different Federal forms that the private sector must fill out each year. That takes 143 million man hours. The Federal Paperwork Commission recently estimated that the total cost of Federal paperwork imposed on private industry ranges from $25 billion to $32 billion a year, and that "a substantial portion of this cost is unnecessary."
- Regulatory requirements imposed by Federal, state, and local governments are adding between $1,500 and $2,500 to the cost of a typical new house.
- On the basis of a conservative estimating procedure, the aggregate cost of complying with Federal regulation came to $62.9 billion in 1976, or over $300 for each man, woman and child in the United States. On the same basis, these costs may have reached $96.7 billion in the fiscal year ending September 30, 1978.
- The minimum wage law has priced hundreds of thousands of people out of the labor markets. One increase alone has been shown, on the basis of careful research, to have reduced teenage employment by 225,000.
- Approximately $10 billion of new private capital spending is devoted each year to meeting governmentally-mandated environmental, safety, and similar regulations rather than being invested in profit-making projects. Edward Denison of the Brookings Institution has estimated that in recent years these deflections of private investment from productive uses have resulted in a loss of approximately one-fourth of the potential annual increase in productivity.
- The nation as a whole feels the effect of government regulation in a reduced rate of innovation and in many other ways. The adverse consequences of government intervention in business decision-making range from a slowdown in the availability of new pharmaceutical products to the cancellation of numerous small pension plans. Congressman Gene Taylor, whose figures on the extent of the Code of Federal Regulations I have previously cited, declares: "The cost imposed on the American economy by federal regulatory activity is now more than $60 billion per year. This serves to drive up the cost of consumer items, harasses small businessmen, fuels inflation, and increases the tax burden on the individual citizen."
An Ominous Trend
Suppose we turn back, from our survey of the present enormous power and control now exercised by government, to a look at its growth since 1854 in England when Herbert Spencer was already expressing his alarm at the extent of that control. If the reader will glance down the list of the interferences that Spencer was then deploring, he will see that our own government is still engaged in all of them, or their equivalent (with the exception only of disseminating Christianity and sending out emigrants), but has added literally hundreds more.
In 1977 The Conference Board of New York was referring to some of that year’s economic interventions: price and income controls; limitations on profits; growing representation of workers and government on company boards of directors; statutory wage hikes; credit limitations; foreign exchange and import controls; limitations on foreign ownership; rent controls and subsidies; regulations on land-use planning; environmental, safety and consumer protection regulations; antitrust laws; direct and indirect taxes; and government ownership. But the list could have been indefinitely extended.
There are two or three ways of trying to measure the size or growth of government quantitatively. One index is the number of people that it wholly or partly supports. In 1940 all American governments, Federal, state and local, were employing 4,474,000 people. In 1977, the number was 14,624,000. The Federal government alone, in 1978, employed 2,066,000 persons in its armed forces and 1,930,100 in full-time permanent civilian employment. In addition, it was making Social Security payments to some 33 million persons, and the Congressional Budget Office was estimating that about 44 million were receiving some form of welfare aid.
The annual expenditures of the Federal government tell a succinct story. If we take them at ten-year intervals since 1929, we get the following result:
1929 $ 3.1 billion
1939 8.8 "
1949 38.8 "
1959 92.1 "
If any forecaster had dared to predict in 1929 that fifty years later the Federal government would be spending nearly 160 times as much in dollars in a single year (or 43 times as much in "real" terms), nobody would have believed him. By such a comparison, we have had a 4,200 per cent growth in the Federal government since 1929.
A Bewildering Mass of Government Interventions
Some readers may object that it is meaningless to complain about the mere number of laws; that we should carefully separate the "good" laws from the "bad," and deplore only the latter. What this objection overlooks is that the mere multiplication and proliferation of laws is itself a major evil. Every unnecessary law is itself bound to be pernicious. And almost all laws that interfere with the functioning of the free market tend to delay or prevent necessary readjustments in the balance of production and consumption and to have other consequences opposite to those that the framers intended. When the rules of the game are being changed every day, when the totality of laws and regulations reaches the tens of thousands and the hundreds of thousands, the number of legislative blunders must multiply far more than proportionately. How is it possible to talk of retaining our liberties, for example, when collectively we are subjected not only to thousands of prohibitions and compulsions but to daily increasing prohibitions and compulsions?
More than forty years ago the Swedish economist Gustav Cassell was warning: "The leadership of the state in economic affairs . . . is necessarily connected with a bewildering mass of governmental interferences of a steadily cumulative nature. The arbitrariness, the mistakes and the inevitable contradictions of such a polity will, as daily experience shows, only strengthen the demand for a more rational coordination of the different measures and, therefore, for unified leadership. For this reason planned economy will always tend to develop into dictatorship."
Whatever the outcome may be, the future seems ominous. By whatever standard we measure it—the number of laws, the rate at which new ones are enacted, the multiplication of bureaus and agencies, the number of officeholders, pensioners, and relief-recipients the taxpayer is forced to support, the total or relative tax load, the total or per-capita expenditures—there has been an accelerative growth in the size, arbitrary power, and incursion of government, and in the new prohibitions, compulsions, and costs it keeps imposing upon us all.
1Newsweek, January 10, 1977.
2Letter, June 7, 1978, from Agnes L. Kerr, Director, Administrative-Legislative Division, Office of the Secretary of State, State of Connecticut.