ABSTRACT:  Most people agree that government regulation is excessive, but they lack a principled basis for deciding the appropriate level of regulation.

Regulation is making the United States uncompetitive. It is going to lose jobs, companies, entrepreneurs and human capital to other countries. In fact, it has lost jobs, companies, entrepreneurs and human capital already and that trickle of a loss may turn into a flood.

                In theory democracy is a self-correcting system. When government is out of step with the will of the people, the people can vote out those who are unresponsive. Unfortunately, democracy’s theoretical self-correcting nature is thwarted by several factors. Lobbyists petition legislators in ways the public never sees and cannot match; regulators are frequently captured by the industries they are supposed to regulate; special interests concentrate political contributions and possibly most daunting bureaucracies are insulated from public pressure to correct inequities. 

                On the other hand, no one wants to allow child labor, to have to test their own drugs or to personally inspect the plane they fly on. So, there is baseline agreement that some regulation is needed. The issue is how much.

                The issue is how one arrives at a principled balance between needed regulation and maximum personal and economic freedom. This paper analyzes three principals that can provide the basis for principled regulatory reform. These principals are: (i) to automatically grant approval for any personal or business action unless the government objects within a limited period of time, (ii) subject all laws, rules and regulations to a substantial harm test, all those which do not prevent substantial harm should be repealed or judicially overturned, and (iii) except for industries that are inherently dangerous like nuclear power, airlines or pharmaceuticals, all government rules and regulations should be reduces to some limited number of pages written in plain English.