In his book “By the People: Rebuilding Liberty Without Permission,” Charles Murray discusses a novel idea for pushing back against the onerous encroachment of the regulatory state: regulatory civil disobedience. Charles Cooke, in a review of Murray’s book for the National Review, writes:
Murray’s troops are lawyers — representatives of a proposed pro bono group that he has termed “the Madison Fund” — and their role in the mutiny is to “pour sugar into the government’s gas tank.” Murray envisions that, by tying up in court the most capricious and petty among the regulators, his liberty-friendly attorneys would achieve two salutary victories against Goliath. First, they would bring much-needed legal relief to a host of tormented Davids: No sooner would the government threaten to end a career or put a company out of business than a counselor with a legal briefcase would show up and announce his intention to take it from there. This, in turn, would force the nation’s mandarins to rethink their approach, enjoining the out-of-control bureaucratic state to contemplate whether it is really worth issuing a citation for that minor infraction. Just as the federal government lives in constant fear of restricting speech lest the ACLU show up at its door, and just as the states tend to shy away from limiting the right to keep and bear arms for fear that the NRA will jump on their case, so too would America’s many Departments of Frivolous Interference think twice before sending out a crack squad to smash a peanut with sledgehammers.
Advocating for just such a “Madison Fund” has always appealed to me as a possible means to help defend the innovators and entrepreneurs who, merely seeking to experiment with new technologies and business models, encounter the regulatory juggernaut standing in their way. The thought lay dormant in my mind until only very recently. Then, last Friday, Mercatus scholars Adam Thierer and Eli Dourado released an article on Medium in which they discuss the need for just such a fund.
Thierer and Dourado toy with how just a fund, or fully fledged nonprofit legal defense firm would work in practice. Although the details still remain murky, the authors’ conclusion bears serious consideration:
By defending the right to innovate even when it goes against anachronistic laws or overbearing prosecutors, an Innovator’s Defense Fund can act as a catalyst for dynamic new products and services that would otherwise languish under the heavy yoke of excessive government regulation. Giving innovators confidence in the fact that they aren’t standing alone is essential if we hope to boost global competitiveness, spur economic growth, and achieve long-term prosperity.
But this model won’t just help those harmed by excessive regulatory burdens—it will also force a realignment of the regulatory state to focus its efforts only where the public interest is most in need of government oversight. Thus, regulators will be incentivized to pursue only those individuals and corporations that engage in the most capricious violations of safety, privacy, and other practices harmful to consumers, employees, and the general public.
Innovation is among the primary drivers of the explosive growth of the modern digital economy. Burdensome, out-of-date regulations and bureaucratic rulemaking that fails to take account of the rapid speed associated with technological change only serve to forestall progress and the flourishing of human society. In some situations, regulations can certainly serve the public interest; but when those rules—largely designed to govern the affairs of 20th century business practices—clash with the disruptive innovation that fuels the engines of the digital age, we should wonder whether there might t be a better way to protect the general population, while still giving entrepreneurs the necessary leeway to build new businesses, experiment with new technologies, and serve the interests of society by bringing their goods and services to market.
The Innovator’s Defense Fund could cure what ails our modern regulatory state while giving the next wave of innovators and entrepreneurs the breathing room they need to flourish.