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Posted by on Nov 7, 2016 in Business | 0 comments

The Murky World of Compliance in Business

In today’s political climate, one ages-old debate still burns hotter than all the rest: large vs. small government. Lots of people on the Right seem to think even the words “government” and “regulation” are dirty, and that any vote cast for a larger government is somehow a blow to our freedoms as individuals.

That’s clearly a gross oversimplification, so let’s clear the air: government is civilization. There is no other social institution which is easier for people to take part in, and no other mechanism that is more susceptible to the will of the people. If we don’t like the way government works, we have the power to change it.

But a big part of the complex machinery we call government is regulation, and herein lies yet another can of worms. Regulations meant the end of child labor and the inception of the five-day work week, so clearly regulations are vitally important. But like any other enterprise, regulations can sometimes go too far.

Regulation and the Modern World

After all these long years since America was founded, we’ve grown our government into something that touches nearly every aspect of modern life. For most of us, this is as comforting as it is inevitable — but for a dispiritingly large portion of the populace, this is seen as a march toward slavery, rather than a march toward unity and common cause. The truth is, government gives each of us a voice — whether or not we’re motivated and informed enough to actually use it.

The point is, modern life would scarcely be possible without government and sensible regulations. As a case in point, here are three of the largest areas where regulation helps keep the peace:

Environmental Regulations

Human beings can’t be trusted with even the simplest acts of stewardship. How many times have you stepped in somebody’s gum on the sidewalk? How much litter do you bike past on your way to school or work?

People are terrible about caring for the environment, which is why the government provides measures to curb our reckless and harmful behavior. It might seem perverse for one group of crafty apes to regulate another, but it’s the best we’ve got right now. The Environmental Protection Agency (EPA) is the governing body responsible for policing pollution levels and carbon emissions, ensuring the integrity of our water sources and generally holding industry accountable for what it does to our planet.

Folks who categorically mistrust the government seem awfully confident trusting massive corporations to do what’s right, no matter the profit margins involved. Environmental regulations might just be the most important type of regulation on the books — and now that we know just how far we’ve let things come, getting a handle on global warming depends more on sensible regulations than on anything else we can throw at the problem.

Advertising Regulations

You probably don’t expect to be told the truth during a product advertisement, but you likely hope for it just the same. Luckily, advertising is a heavily regulated industry.

One of the primary purposes of the Federal Trade Commission is to ensure corporations are being honest about their products and not promising things they can’t deliver. The laws that govern truth in advertising here in America are complicated, but they exist for a very good reason: to ensure the product you pick up off that shelf is exactly what you expect it to be, or at least in the ballpark.

Labor Regulations

As mentioned above, labor regulations have been hugely important for bringing about some massive changes that most of us take for granted. With the help of unions, government employment regulations helped stamp out child labor in this country, instituted the five-day work week and the eight-hour work day, and generally made it possible for people to band together and bargain collectively in the name of the greater good. None of this is possible without employment and labor regulations.

And yet, all throughout this country, unions and sensible labor laws are under direct threat from Republicans and their credulous supporters. Every worker on the planet deserves dignity — and labor regulations are currently the very best way to make sure they get it.

The list goes on and on. Regulations are also vitally important for ensuring companies keep records and manage documents in a responsible way and also for improving the way our public schools are run.

But yes — there are areas where government regulations might, even objectively, go too far.

Where Government Oversteps

The Federal Railroad Administration (FRA) requires that all trains operating in the United States feature an “F” painted at the front end, so there’s no confusion as to which end you’re looking at. In Maryland, bored bureaucrats occasionally shut down children’s lemonade stands if they don’t have business licenses.

Yes — the government does overstep sometimes. But in no way does this mean “regulation” in general is a bad thing, any more than pointing out that child-molesting bishops speak for all of Christianity. Painting with a wide brush is a very dangerous thing.

If all regulation is evil, then Dodd-Frank is evil. In the Economist article linked above, this argument is actually made in a serious way, despite the fact that Dodd-Frank has been an invaluable part of America’s defense against economic Armageddon. The worst you can say about Dodd-Frank is that it’s too complex. That it exists is clearly a good thing — but now the work begins to sharpen, update and make more specific the law that was ignored long enough to trigger one of America’s worst financial collapses.

The complexity of a regulation is not an excuse to ignore it, just as ignorance of the law is not a get-out-of-jail-free card. Massive corporations should be inconvenienced by regulations from time to time — not just because they can afford it, but also because we should expect the same excellence and the same due diligence we expect from any of the world’s democracies. If governments should fear their people, rather than the other way around, the same should go for corporations.

To finish up, it’s worth mentioning the Affordable Care Act, which will continue to be a lightning rod even long after the 2016 election has wrapped and now functions as a case study in small vs. large government. Opponents of the ACA claim it’s a regulatory burden on Americans and that “forcing” Americans to buy health insurance is tyrannical. They conveniently forget we’re all required to purchase insurance on our automobiles and our homes. But healthcare? That’s a bridge too far. They forget, too, that without good health, life is miserable.

Let’s clear up a point of confusion: the ACA was a regulation on industry — not on private citizens. The ACA attempted to ensure that health insurance companies operated according to some very reasonable restrictions on their historically terrible behavior. If Aetna’s departure from the exchanges is any indication, for-profit medicine is incapable of turning a profit and treating their customers with respect at the same time. So good riddance to them. Apparently they can do without the millions of brand-new customers created by the ACA.

More often than not, regulations are done in the name of ensuring the safety and well-being of our population. Regulations aren’t voted into law out of pure malice against the American people. Making our peace with the reality of regulation means we need to stop thinking of ourselves as victims and instead think a little bit more about what it means to work together to build a better world.

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