Definition

Regulation is a category of rules from the political domain which directly influences the choices and the actions of individuals without their consent.

Discussion

Overview

The nature of regulation is always prohibitive. Regulation first and foremost prohibits some or all individuals from engaging in a particular activity. By granting exemptions to those prohibitions, regulation is able to control who engages, and how they engage, in any particular activity.

We usually refer to these exemptions as licenses, permits, certificates or other types of authorizations.

Regulation, like criminal law, is a type of public law. This means the rules from regulation apply to individuals without their consent. This is in contrast to private (civil) law where only individuals who have agreed to the rules can be bound by them.

To the extent regulation could align with the Legal Principle to not aggress, it may be useful for minimizing the likelihood of causing substantial risks of harm. However, regulation by its nature falls outside this scope. It, therefore, beaches the Legal Principle and as such is contrary to universal peace.

This is not to say society should not have rules which “regulate” the activity of individuals, including in matters of public safety. However, there are several options aligned with the Legal Principle which safeguard against the very consequences regulation seeks to prevent.

Applying the Legal Principle**

Is regulation appropriate?

The Legal Principle is foundational. Dedicated frameworks must be developed by communities and networks of individuals for the Legal Principles consistent application. Otherwise, the many complexities of human interactions will increase the likelihood of aggressing.

Collectives of individuals such as geographical communities, private associations or digital networks will inevitably include people within them who disagree on the precise definition of terms like ‘competent adult,’ ‘substantial risk,’ and ‘reasonable’ force. These definitions may be resolved by delegating a local community or network with the creation and implementation of rules which, in effect, mirror regulation.

It is essential we distinguish between a need for rules for complying with the Legal Principle and the method by which those rules are established and enforced. This method must also comply with the Legal Principle.

Individuals in local communities, for instance, are expected to define their norms through association and consent, not through the coercive power of politics.

Example:

a truck hauling hazardous chemicals through town must comply with the local community’s “regulations” defining which type and what quantity of chemicals creates a substantial risk, and their tolerable proximity to residents.

Regulation is coercive

The nature of regulation is coercive.

Moreover, most regulation today actually restricts many activities that do not harm or create substantial risks to others. Such regulation is doubly coercive. - Examples include: regulations aimed at achieving moral goals, controlling competition, or favoring some groups or companies over others. Coercion, even when seeking to accomplish worthy goals, breaches the Legal Principle.

Regulation is unknowably complex**

“The more laws and commands there are, the more thieves and robbers there will be.” – Lao Tzu, Tao Te Ching.

No single person can be familiar with all the countless regulations applying to their daily life. Such restrictive regulations create unknowing criminals out of most of us.

Private rules can still be applied

As owners of their property, private companies, individual homeowners, or Homeowners Associations (HOA) that have complied with their rules of operation can issue any rules and regulations they prefer concerning all people who enter their property. This conclusion remains true even if their rules have no connection with the Legal Principle (so long as any risk posed is limited to those who’ve voluntarily agreed to these rules).

These rules only apply to individuals who voluntarily consent to enter these properties, where additional rules have been established. Due notice of the rules (via a clear physical sign or verbal information) must therefore be given by the owners.

Rules on private property reduce the relevance of regulations

As we move toward a world where we privatize more and more property, the entire issue of mandatory regulations becomes less critical.
- Returning to our example of the truck hauling hazardous chemicals through town, if we imagine the road to be privately owned, as with all other private property, the road owner will determine under what conditions such a truck could use the road. So long as any risk posed to people is limited to activity only on that road, and the risks are consented to by people using the road, there is no cause to mandate any regulation. Competent adults are entitled to consent to any hazards for any reason.
Some mandatory regulations will always remain, where risks to others are substantial and potentially far-reaching. Recklessly storing dangerous chemicals or powerful explosive devices would always be prohibited, for example, unless people specifically consent to the specific risks.

The problems with current regulatory systems

Regulatory capture

Regulations create an unfair competitive advantage for bigger companies.
It is common for people to leave regulatory jobs to join the corporations they previously regulated. This revolving door, being supposedly “too big to fail”, and buying political influence, are all features of crony capitalism, whereby typically larger businesses can use their resources to influence regulations to stifle competition.

Case study: United States

The Code of Federal Regulations in the United States is 100 times as long as the entire works of Shakespeare - not even the best lawyer in the world can know them; therefore, we are all at risk of breaking them.
Between 2021 and 2024, regulations required businesses to allocate 356 million hours to paperwork and incur $1.8 trillion in costs.
Small businesses pay 20% more than their larger counterparts to comply with these same regulations, a systemic competitive disadvantage.
There are 33 million small businesses that employ nearly half of the U.S. workforce and generate over 43% of the country’s economic output.
The less these businesses need to spend on regulations, the more money available for employing people and providing better service to customers.

Misallocated resources and causes unintended consequences

Regulation often has visible benefits. It also always has opportunity costs and negative impacts which are, in most cases, less visible than the benefits.

Further resources

Rebecca Haw Allensworth, The Licensing Racket (Harvard University Press, 2025)

Per Bylund, The Seen, the Unseen, and the Unrealized (Lexington Books, 2016).