Regulation: Managing the Antinomies of Economic vice and Virtue

In the quarter-century that SLS has been published, regulation has emerged as a new, and for many exciting, inter-disciplinary field. The concept itself requires a wider view of normativity than the narrow positivist one of law as command. It is certainly protean, ranging over many fundamental questions about the changing nature of the public sphere of politics and the state, and its interactions with the ‘private’ sphere of economic activity and social relations, as well as the mediation of these interactions, especially through law. This survey aims to outline and evaluate some of the main contours of the field as it has developed in this recent period, focusing on the regulation of economic activity. Regulation is seen as having emerged with the withdrawal by governments from direct provision of many economic and social services, to be replaced by corporatist bureaucracies and quasi-public agencies managing the complex public-private interactions of financialised capitalism. The arguments for ‘smart’ regulation have, in an era fixated on neo-liberalism, generally legitimised delegation of responsibility to big business. Its advocates, having been drawn into policy fields, have perhaps too often lost their critical edge, and allowed it to become instrumentalised, reflecting the technicist character of its practice. 1. ORIGINS AND APPROACHES The recent concern with regulation emerged in the 1970s, as a field of political battle as much as scholarship. The first issue of Regulation. AEI Journal on Government and Society, published by the Cato Institute, aimed to address the ‘extraordinary growth in the scope and detail of government regulation ... one of the two or three most significant political facts of our times’ (Brunsdale, 1977: 2). A paper in the same issue by Irving Kristol, while recognising the need for regulation and even for its increase in a complex society, attacked the 'new class' who in his view benefited from powerful government, naming them as Naderites, with career jobs in US agencies such as EPA or OSHA (Kristol, 1977). This critique drew on the economistic analysis of the politics of regulation by Stigler, who argued that ‘as a rule, regulation is acquired by the industry, and is designed and operated primarily for its benefit’ (Stigler, 1971: 3). Although in some ways similar to analyses of regulatory ‘capture’ more familiar in socio-legal studies, this perspective challenged the need for regulation, while more left-wing approaches tended to take that necessity for granted, seeing ‘capture’ as diverting public purposes to private ends. The right-libertarian critique of the arguments for government action targeted the weaknesses of the assumptions for such action in classical welfare economics, and saw capture as intrinsic to state action. Far from being tamed, and despite the dominance of neo-liberal ideas since the 1970s, regulation has continued to expand. Nevertheless, the battles continue today, as one of the 1 I am grateful for comments from two anonymous reviewers, and to Dave Campbell for his contributions, not least in our stimulating debates and collaborations over the years, despite some sharp disagreements. I am entirely responsible for remaining errors and the inevitable limitations of this paper.