Deregulation in industries such as airlines, railroads, trucking, energy, and telecommunications has produced significant benefits for consumers and the broader economy. These efforts often reflected bipartisan agreement that excessive regulation can limit competition, raise costs, and reduce innovation.
We are skeptical of recent efforts to influence the behavior of private firms by imposing Environmental and Social Governance (ESG) obligations on corporate boards or by requiring the inclusion of designated stakeholder representatives, such as employees or public interest groups.
If the goal is to influence the behavior of private sector firms, the most effective and transparent approach is through taxation and regulation. These tools allow policymakers to establish clear incentives and constraints while preserving the ability of firms to operate efficiently and to allocate resources in response to market conditions.
The remainder of this policy position focuses on two areas where the regulation/deregulation debate is particularly important:
- Regulation and Financial Markets
- Regulation and Consumer Protection
We recognize that regulation is a much broader topic, but these areas are among the most consequential and actively debated.
Deregulation of the airlines, railways, trucking, energy, and telecommunications industries have all provided significant benefits to consumers and the economy as a whole. These efforts all had some degree of bipartisan support.
We reject the current fad of attempting to regulate private firms by imposing Environmental and Social Governance (ESG) obligations on the Boards of Directors of private sector firms. We also reject regulations requiring that these Boards include representatives of various “stake holders” such as employees or public interest groups. If we want to influence the behavior of private sector firms the most efficient way of accomplishing this objective is through taxation or regulation. This allows the private sector to respond by maximizing shareholder value subject to the constraints and incentives that the public sector establishes.
The remainder of this Policy Position focuses on two areas of the Regulation/Deregulation debate: 1) Regulation and the Financial Markets and 2) Regulation and Consumer Protection. We recognize that regulation is a much broader topic but these two issues are the most controversial ones at the moment.
Go to Part 1) Regulation and Financial Markets