Will Brexit be exempt from the Iron Law? (Updated 22 June)

For a 21 June Breitbart News Daily interview on this topic with Kesten Green, go to the recording on this page.

For further notes on this topic, see “Brexit would herald a boom for Britain following the main entry, below.

The Iron Law of Regulation states “There is no form of market failure, however egregious, [that] is not eventually made worse by the political interventions intended to fix it.”

Britons are currently subject to regulation by unelected bureaucrats from diverse other countries in the European Union. British voters have an opportunity to reduce regulation, and to tailor regulation more to their own needs, by voting to exit from the EU (Brexit) in a June 23 referendum.

In our review of the many experimental studies on the effects of regulation, we have been unable to find any exceptions to the Iron Law of Regulation. The Iron Law predicts that Britons will be better off without the burden of EU regulations in terms of economic growth, life satisfaction, and life span. The prediction is logically conditional on the assumption that an independent Britain remains more lightly regulated than does a UK-less EU.

Britain will either exit the EU, or remain a member, so how can we ever know whether the Iron Law forecast is right? If Britain leaves the EU—as seems likely on the basis of recent polling—the Iron Law predicts that Britain will grow more strongly over the next ten years than the average of the founding nations of the EU, assuming those nations remain in the EU.

We are open to alternative proposals for objective tests of the effect of Brexit on the wellbeing of the British people. Please send us your suggestions if you consider you have a better test than ours.

Brexit would herald a boom for Britain

Kesten C. Green
22 June 2016

The Iron Law of Regulation predicts that Brexit would bring in a boom for Britain. The referendum on the 23 of June presents a wonderful opportunity for the British people.

Why? Because Britons would no longer be subject the mess of EU regulations that they are currently burdened down with. Regulations destroy innovation and economic activity. The more distant the regulators are from the people they are regulating, the worse that problem is likely to be.

The Iron Law states that, “There is no form of market failure, however egregious, [that] is not eventually made worse by the political interventions intended to fix it”.

In other words, the Iron Law tells us that regulation doesn’t work.

Is there any reason to think that Britain is an exception to the Iron Law of Regulation?

There is no good reason for governments to interfere with people’s lives and businesses unless there is going to be an increase in the net welfare of the community over the long run.

You can’t achieve that by taking away freedoms from some people and giving privileges to others.

Also, regulations have to offer such an improvement over the current state of affairs that the benefits would outweigh the loss of freedom that being regulated involves. And people value the freedom to make their own decisions very highly.

(After all, even fans of regulation believe that it is other people’s decisions that need to be regulated, not theirs!)

On our IronLawofRegulation.com website, we provide a list of ten “conditions necessary for successful regulation”.

For example, the first one is, to know the endowments, relationships, and preferences of the people affected. How likely is it that an unelected Brussels bureaucrat from Bulgaria will know or care about the preferences of a beef butcher in Bath… or her customers?

These problems with regulations are well-known to economists who believe in economics.

It’s not surprising, then, that we have been unable to find any experimental evidence that any regulation has ever been the cause of an increase in net welfare over the long run.

We are confident that Britons would be happier and more prosperous if they vote to throw of the yoke of EU regulations. If they vote for Brexit.