President Trump's recent executive order, titled "Reducing Regulation and Controlling Regulatory Cost," speaks the language of the principled libertarians, but its beneficiaries are likely to be the thugs.
The order prohibits any agency from issuing any new regulation unless it also repeals two regulations that cost as much as the new one. "Costs" mean the cost of complying with the regulation. The harms that were the reason for the regulation don't count at all.
David Dana and Michael Barsa observe the implications of Trump's order. The Department of Interior created a set of new regulations in response to the 2010 Deepwater Horizon disaster, in which BP spilled nearly 5 million barrels of oil into the Gulf of Mexico. It was the largest marine oil spill in history, and, Dana and Barsa wrote, it cost "nearly $9 billion for lost fisheries and $23 billion for lost tourism, not to mention the catastrophic effects on marine life and birds. Yet under the president's order, the only costs that matter are those to the oil companies. Costs to the public and to the environment are completely ignored." The regulations aren't cheap; the cost to the industry has been estimated at hundreds of millions. But that's peanuts compared to the costs of another spill.
Trump is a big fan of Ayn Rand. Like her fictional hero John Galt in "Atlas Shrugged," he wants to free business from the heavy hand of government. But this is an oddly distorted libertarianism, in which Rand's villains masquerade as her heroes: those who talk most of liberty are the looters and moochers.
Conservatives worry about "regulatory capture": the danger that regulators will abandon the public interest at the behest of regulated industries, keeping prices high and stifling competition. The solution is to get rid of regulation: the state should butt out and let the market operate. There's no doubt that capture has sometimes happened. A notorious example is the Civil Aeronautics Board: after it was abolished in 1985, airline competition intensified and prices plunged.
There is, however, another way in which unworthy special interests can seize control of government. They can work to cripple regulation, so that they can hurt and defraud people. Libertarian rhetoric has turned out to be a rich resource for them.
Barack Obama is actually a better libertarian than Trump. He spent years teaching at the University of Chicago, where the idea of regulatory capture was developed. That had an impact: when he was President, he demanded (following a principle laid down by Ronald Reagan!) that any new regulations survive rigorous cost-benefit analysis. That immunizes regulations from capture, and makes sure that regulators take account of just what worries Trump, the cost to businesses. The overall net value -- benefits minus costs -- of Obama's regulations was upward of $100 billion.
Trump, on the other hand, has replaced cost-benefit analysis with cost analysis. Benefits are ignored. This isn't even business-friendly. The Deepwater Horizon oil spill destroyed hundreds of well-functioning businesses. On the other hand, the businesses that were crushed were small and had nothing like BP's political connections.
There's room for reasonable disagreement with Obama's regulations. The calculation of both costs and benefits inevitably involves some guesswork. The cumulative effect of regulation can hamper businesses. The big difference between Trump and the standard conservatives' critique of Obama is that Trump's executive order holds, as a matter of principle, that benefits don't matter. Consumer fraud, tainted food, pollution, unsafe airplanes and trains, epidemic disease all have to be put up with, if stopping them would increase the costs of regulation.
Trump's new "regulatory reforms" show a persistent pattern. One targets a rule that requires retirement advisers to put clients' interests ahead of their own. Conflicts of interest in retirement advice, for example steering clients into products with higher fees and lower returns, costs American families an estimated $17 billion a year. You can understand why some parts of the financial industry hated the rule. That $17 billion was going into someone's pocket, and that someone finds libertarian rhetoric right handy.
The Libertarian Party, which got more than 4 million votes in the last presidential election, is enthusiastic about the order. It shouldn't be. The order is a deep betrayal of libertarianism, which holds that people should do what they want as long as they don't hurt anyone else.
Freeing businesses to hurt people is not libertarian. The libertarians -- at least, the ones who don't see through Trump -- are being played. If the crippling of the state allows economic behemoths to do whatever they like to others, then what libertarianism licenses, in the garb of liberty, is the creation of a new aristocracy, entitled to hurt the commoners. This is just a different kind of mooching and looting.
It is a new road to serfdom. It reinforces the prejudices of those on the left who repudiate capitalism. The libertarians who embrace it, thinking that they are thereby promoting freedom, are useful idiots, like the idealistic leftists of the 1930s whose hatred of poverty and racism led them to embrace Stalin. John Galt is a sap.