We begin with a common sense argument against and explanation of legislation and regulations that either serve no purpose or serve a purpose counter to that which is claimed. It is a myth that we need a law to get people to do what is in their best interest. The underlying presumption that this is needed stems from motivated reasoning.
My point, of course, is not that existing laws against burning money are likely to become a major burden on industry. Slippery slopes exist, but this isn’t one of them. I do, however, claim that plenty of existing regulations closely resemble laws against burning money. Correctly applied, they are virtually harmless, because they forbid actions that businesses would almost never take. Since the laws are routinely incorrectly applied, such laws are a major and destructive burden.
Discrimination laws are the clearest example. Taken literally, discrimination laws normally just tell businesses, “You’ll hire the best person for the job, if you know what’s good for you.” Which is exactly what businesses would do if they wanted to make as much money as possible.
Why then are discrimination laws so controversial — and compliance so onerous? Because discrimination laws routinely incorrectly identify discrimination. In the truest of meritocracies, large group disparities abound. Why? Because humans’ interests and aptitudes vary widely! Just look at the distribution of Wikipedia volunteers to see how widely. Discrimination laws are burdensome because enforcers willfully ignore these truisms — and therefore see presumptive discrimination everywhere.
This alludes to a very important principle that should be our first instinct against arguments that “there should be a law” to bring about an obvious good—something that would have a beneficial result. In fact, a proponent of a rule of regulation like zoning, minimum wages, construction codes, workplace behavior, or safety should be immediately dismissed unless they can point to and substantiate a meaningful case of externality at play.
Regulation is coercion. Legislated law is coercion. This is not at all disputable. We do not need coercion to get people to do things that are beneficial to themselves. We generally do not need coercion to get socially beneficial outcomes unless we have a case of externality or undue influence working at cross purposes. For this reason the overwhelmingly best method for getting us down pathways to beneficial outcomes is the free market.
Similarly, myths don’t become true by widely-held motivation. Case in point, inflation-adjusted government higher education spending per student shows a meaningful and clear upward trend for decades. The problems with college education ain’t money.
For decades, there have been complaints that states have been cutting funding for colleges, often referred to as state disinvestment. But in my annual report tracking trends in state funding, I show that state disinvestment is a myth. The figure below shows state funding per student over the past 43 years. The dashed blue regression line shows the long-term trend. If state disinvestment was real, the line would be downward sloping, but it has an upward slope, documenting that states have been increasing funding over time by about $48 per student per year.
The hope that falling college affordability could be attributed to a simple answer like a lack of government support leads people to latch on to this myth, which is ever-so conveniently served up by the vested interest who wish to see these empires grow. Unfortunately for those seeking a single simple solution, this one proves untrue.
There is likely another problem at work, though. Rarely is there a monocausal source when it comes to big problems. There might not be a clearer example of this than with homelessness. To wit: It is a myth that homelessness can easily be cured—especially via blunt force.
Contra President-elect Trump’s proposal, the government coercing people, directly or indirectly, to undergo mental health or drug addiction treatment flagrantly assaults their autonomy. As psychiatrist and civil libertarian Thomas Szasz wrote in his classic work The Myth of Mental Illness: Foundations of a Theory of Personal Conduct, “Involuntary psychiatric interventions violate the fundamental moral and political principles of free societies and turn psychiatric authority into a species of despotism.”
Numerous studies have also failed to find evidence that involuntary mental health treatment is effective. There is some evidence it may increase suicidal tendencies.
Studies on the efficacy of mandatory drug rehab have also had negative results. Compulsory drug rehab has high relapse rates. There is also evidence that it increases the risk of subsequent overdose deaths among people released from rehab.
Enforcing public nuisance laws or penalizing actions like blocking streets, creating public health hazards, or disturbing the peace is not inappropriate or unjust. Incarcerating peaceful people who choose to live unhoused is. And coercing people with substance abuse and mental health problems to undergo treatment assaults their autonomy.
The problem of homelessness is subtle and nuanced. The first concern should be for those unhoused and suffering. The secondary but still important concern should be for the rest of us dealing with the danger, disturbance, and distress homelessness causes. Too often the order of concern is reversed.
Notice that while there are low-hanging fruit opportunities (making housing more affordable and relaxing restrictions on schizophrenia treatment), the essence of the problem is wild. Top-down, simplistic solutions are bound to both fail at the main goal and cause severe by-product problems in their own right.
Mythical thinking is mistaken reasoning. It is easy to reach for, cling to, and spread forth. Therefore, we need strong intellectual inoculation to fight off the virus.
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