Hard cases make bad law is a legal maxim that means that the extreme cases make for poor general guidelines. Used to be true, but today hard cases become new regulation.
Guidelines have a cost. Regulators abound to prevent and punish every transgression. No regulator is free. None reduce the cost to carry on legitimate business. Regulation harms honest people.
Consumer protection legislation is such a good idea that it is overdone. A few instances or even a single instance of emotionally charged failure leads to costly and intrusive rules. The media is a willing accomplice. Hard cases make good press.
In 1904 American Supreme Court Justice Oliver Wendell Holmes stated:
“Great cases, like hard cases, make bad law. For great cases are called great, not by reason of their importance… but because of some accident of immediate overwhelming interest which appeals to the feelings and distorts the judgment.”
Somewhere between a perfect world and one where suppliers try to maim, kill or bankrupt their customers is the appropriate level of intervention. Most of that law exists, but regulators aim to deal with every possibility even those so rare as to be nearly unknown. This creates the real problem.
My late friend, Dr. Allen Worthington, called it “learned helplessness.” The condition wherein a person becomes helpless and uses their weakness to get the world to work out for them. Victim as strength. Over-regulation permits this excess.
People do better in the world if they have personal competence. Using skill, experience and judgement in acquiring goods and services is the best regulation. Common sense says you cannot get more than you pay for. Cheap is expensive. If there were fewer regulations regarding electrical appliances, would people buy the cheapest knowing that they might be electrocuted by a poorly built toaster? Probably not. But if they believe that someone is “responsible” for protecting them, they may abdicate their duty to assess value. No one can regulate so that oblivious people are safe. So why incur the costs of excessive regulation for the other 90% or more who are not oblivious.
There are people who are unable to decide and there should be help for them. Others are ignorant and can be educated. They should be. Regulation reduces the urgency of that education and can lead to willful ignorance. “I don’t need to know that, the government will protect me.” and we all know how that turns out.
You do not need to know all the details, but you need to know enough to ask questions and understand different solutions. You must know “your questions.” You need to be able to make decisions. You must learn to take responsibility for outcomes because that is where learning comes from.
Life is pretty much just judgement and organized common sense. Regulation adds little beyond those.
Don Shaughnessy is a retired partner in an international public accounting firm and is now with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.
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