- - Wednesday, August 7, 2019

During his 2016 presidential campaign, candidate Donald Trump promised to drastically reduce the regulatory burdens placed on American business and rein in overreaching regulators whose unpredictability had done so much to depress business sentiment and investment.

The president is delivering on these campaign promises. As a result of a bold series of regulatory rollbacks and reforms, American businesses and households have saved more than $30 billion. This cost cutting and the administration’s clear commitment to curb bureaucratic overreach helped turbo-charge the economic expansion we have enjoyed during the last two-and-a-half years.

As the administration continues its regulatory reform work, it should address and correct an elitist misconception that seriously distorts the analytical process currently used to estimate the benefits and costs of proposed regulations. Reformers should expunge from all regulatory analyses the offensive anti-democratic presumption that ordinary American consumers are incapable of making the rational decisions needed to manage their own affairs.

America is founded on the belief that we can manage our own affairs. Our entire system of republican self-government rests upon popular sovereignty, the bedrock principle that ultimate political authority resides in the people. We asserted our popular sovereignty when we declared our independence and affirmed the natural right of each person to lead the life and pursue the happiness of his or her choosing, free from the threat of tyranny’s oppression.

Through the U.S. Constitution, we sought to better secure our natural rights by establishing the rule of law to protect our persons and property from the arbitrary exercise of unrestrained power. We sought to ensure that, within the broadly defined open spaces bounded by the laws enacted by our elected representatives, each of us would be left alone to freely make the choices that define and direct our lives. 

This is the legitimizing purpose of our constitutional government — to protect our natural rights and the freedom of choice we must have to exercise and enjoy those rights.

As they emerged in the early 20th century, the progressives rejected our founding concept of popular sovereignty based on natural rights and the constitutional system of government established to secure those rights. The progressives renounced the idea that individuals, protected by the rule of law, should be largely left alone to manage their own affairs.

They asserted that the mass of American people could not possibly manage their own affairs in the complex and interdependent urban society that America was fast becoming.

According to the progressives, experts were needed to manage the affairs of modern America; supposedly disinterested experts schooled in the social sciences; unelected experts insulated in the executive bureaucracy who could exercise their professional discretion and apply their superior learning to efficiently regulate the subject matter and lesser citizens under their care.

This anti-democratic concept of the expert regulator got a boost in the 1970s from something called behavioral economics, a branch of the social sciences that purports to show that individuals often act irrationally when making decisions and choosing among available alternatives.

Regulators have always sought to justify their restrictive interventions as needed to protect persons and property from the harm that would otherwise result from external factors such as pollution.  With the emergence of behavioral economics, regulators sought to justify additional interventions as needed to protect persons from themselves, from the harm they would otherwise suffer as a result of their own defective reasoning and poor choices.

Regulators sought to restrict the marketplace alternatives available to consumers and thereby “nudge” them to make purchase decisions that were “better” for the individual and society as a whole. Regulators adjusted the analysis they use to estimate the future benefits and costs of proposed regulations.

They started counting restrictions of consumer choice as a benefit that could be used to justify a new regulation. The results of this choice-restricting approach to regulation include the virtual disappearance of the traditional light bulb, the proliferation of under-performing appliances and the overproduction of undersized automobiles.

In 2015, President Obama reinforced this approach by issuing an executive order that encouraged executive departments and agencies to develop strategies to more fully incorporate research from behavioral economics and related fields into the programs they administer. That directive is still on the books.

President Trump could significantly advance his regulatory reform efforts and strike a resounding blow for popular sovereignty and self-government by issuing an executive order that revokes the 2015 directive, prohibits any future regulatory use of behavioral economics and forcefully reaffirms the government’s recognition that Americans are rational individuals fully capable of managing their own affairs.

Freedom of choice is an essential attribute of a sovereign people. Restricting lawful consumer choices should never be counted as a benefit of regulation.  Restricting choice is a cost of regulation, not a benefit. Elitist anti-democratic presumptions about a supposedly irrational citizenry have no place in the regulatory system of America. Here, the people rule.

• J. Kennerly Davis formerly served as deputy attorney general for Virginia. He is an expert contributing to the Federalist Society’s Regulatory Transparency Project.

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