Regulations may bug big businesses who want to do the things that the regulation stops them from doing. But regulatory compliance as such is rarely a big deal to large firms. Once you’ve got thousands of employees and hundreds of millions of dollars in sales, tasking an extra lawyer with making sure the “T”s are crossed is no problem. But things look very different, as Tim Carney observes, if you’re a small firm or a startup for whom compliance costs could be a big share of your overall cost structure. On the other hand, Kevin Drum notes that precisely for this reason regulations often have carve-outs for small businesses and Suzy Khimm observes that simplifying regulations often means handing discretion to regulators in potentially problematic ways.
To my way of thinking, though, Drum’s observation provides a decent guideline to situations in which there probably shouldn’t be any regulations at all. Big factories shouldn’t be allowed to dump toxic waste into rivers, but small artisanal producers shouldn’t allowed to do this either. It’s a problem if the Gap is defrauding its customers and it’s also a problem if a local boutique is defrauding its customers. If some activity is legitimately dangerous or harmful in a way that makes it worth prohibiting, then letting small outfits get away with it is a terrible idea. But if a sympathetic story about a mom-and-pop operator with a dozen employees who might be forced out of business by a new rule makes you inclined to want to consider an exemption, you ought to consider the possibility that you don’t really favor a regulatory solution at all.
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