Why Regulation Won’t Save Us (And What Might): Part 4

Part 4

Responsible conduct must become embedded into every aspect of our market-driven economy. The benefits of such an approach are ‘driven home’ by a comparison of our system of highway safety to the autobahns of Germany, where the top speeds on large stretches of the road are left to the driver’s judgment. It is, however, an informed judgment because Germans have created an entire system built around safe driving at high speeds – the condition of the roads, the quality of the cars, the age of licensing, the requirements for driver education, all of which are more rigorous in Germany than here.

Despite the high speeds, Germany actually has fewer fatalities on its expressways per mile driven than the U.S. A system promoting safety through education, supportive infrastructure and self-responsibility can be safer than one relying primarily on regulation of speed.

Let me be clear, I’m not advocating deregulation – reducing regulations before we have an effective infrastructure in place is analogous to removing the speed limit on our expressways tomorrow. Does that strike anyone as safe? But just heaping on more regulations without addressing root causes of business dysfunction does not make us safer either.

These out-of-the-box (by mainstream standards) strategies I’m advocating may very well prevent or reduce the severity of future meltdowns. We must have the foresight and courage to create new solutions to old problems which will work in global markets, won’t stifle creativity, innovation or efficiency, and are more effective in ensuring that responsible business conduct is the “rule of the road” in our economic system.