Deregulation may not eliminate poverty, but it can help
The always thoughtful Reihan Salam has a post about whether regulations entrepreneurship stifling can really do much to help poor people. Here is how he puts it…
…To start let me say that I think Reihan’s overall point is correct: you probably cannot alleviate poverty by reducing barriers to entrepreneurship. But I think he is underselling the ability of the deregulations he specifically mentions to help the poor. In particular, Reihan discusses occupational licensing by framing these laws as getting in the way of entrepreneurship, and correctly points out that many poor individuals simply aren’t going to start businesses regardless of the regulatory environment. However, the removal of regulations to help low income people “climb the economic ladder” do not all operate through the pathway of entrepreneurship. And occupational licensing in particular is an example where entrepreneurship is not the only pathway that is blocked…
…In any case, Reihan’s point that we can’t alleviate poverty by removing regulatory barriers to entrepreneurship or other forms of climbing the economic ladder is, I think, correct. We can help a lot of poor people by lowering regulation, but some forms of poverty require better and not just less government than we currently have. Less regulation, for example, is not going to alleviate the kind of deep-seated poverty that predominates Appalachia. Something more needs to happen there.
