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Me on Thursday:
Any process that ignorant voters could use to decide who to trust on [banking] regulations could also be used by ignorant consumers to decide which banks to patronize. Since banking consumers have far stronger incentives to choose well on banks than voters have to choose well on politicians, how can it help to replace a possibly quite severe ignorant banking consumer problem with an even more severe ignorant voter problem?
Surprisingly to me, many commenters argued that voters do not control banking regulators – regulators are an autonomous force that choose according to their own reasons. And most who said this seemed to think it a good thing. I’d guess, however, that they wouldn’t be as eager for autonomous regulators in these five areas:
An autonomous police with power to decide who was a criminal, with little oversight from juries, etc.
An autonomous state religion with power to declare God’s will, and to punish those who violate God’s will.
An autonomous military with power to decide when we go to war with whom, and using what methods.
An autonomous “morals” agency responsible for defining and punishing sexual perversion.
An autonomous censor that can ban any “unhealthy” or “misleading” books, movies, music, etc.
Why do so many support “benevolent dictator” autonomous regulators in banking, product safety, workplace safety, schools, medical devices and drugs, etc., but not in the above five areas? One explanation: traditional (i.e., farmer) societies had these five “conservative” types of regulators, and more modern (i.e., forager) societies were proud to have overthrown or constrained them in the process of becoming modern. New “liberal” types of regulators that lower the status of businesses seem much less problematic to those who see liberal-minded folks as intrinsically more trustworthy than conservative-minded folks.
Left vs. Right Dictators
There have been many expansions of economic freedom throughout history, some (though certainly not all) pushed by governments: - Abolition of slavery - Lending money for interest is expressly allowed (as opposed to in many places during the Middle Ages) - Free trade agreements - A long-term historical trend towards less government corruption - Improved law enforcement, resulting in protection from theft and extortion - Breaking down of caste systems in traditional societies - Depending on your point of view, intellectual property law could be construed as either increasing or decreasing economic freedom - Greater freedom of movement than existed in most places a few centuries ago
And then of course technology has massively increased realized economic freedom regardless of which direction governments push it.
"Any process that ignorant voters could use to decide who to trust on [banking] regulations could also be used by ignorant consumers to decide which banks to patronize."
What? Banks and politicians are two fundamentally different kinds of entities. Different kinds of processes may be available to investigate the two. This is a fantastically sweeping statement, made as if it were simple fact.