The Vanderbilt Libertarians: The Importance of Smart Regulation

Riti Hegde, Contributor

On October 12, the Vanderbilt Libertarians invited Ron Shultis, Director of Policy and Research at the Beacon Center of Tennessee, to speak on its mission and the values of libertarianism. Shultis spotlighted the Tennessee government’s wasteful bureaucracy and corruption and underlined the emerging issues in Tennessee state policy. 

The Beacon Center is a Tennessee-based libertarian think tank that strives to “provide expert empirical research and timely free-market solutions to public policy issues.” Libertarian philosophy values autonomy, individual choice, and free markets. Shultis is critical of various regulations the Tennessee government enacted because he believes they make the markets less free by stifling entrepreneurship and innovation. He discussed how the state of Tennessee requires around 150 professions to have licenses before they are allowed to work. Shultis argued that while these licenses are reasonable for certain professions like doctors and lawyers, they are onerous and superfluous for professions like hair braiders, shampoo technicians, florists. This bureaucracy prevents otherwise talented people from opening new businesses and employing people in their community.  

Overregulation has had a detrimental impact on healthcare in the state. Tennessee has “certificate of need” laws that regulate purchases in healthcare. To purchase new medical equipment in an area, a healthcare provider must prove there is a shortage of such equipment. They need to do this by filing paperwork with the state government, which takes time and money. Shultis reasoned that this is the kind of bureaucracy that needs to be eliminated because it does not allow for the free market to thrive. 

Shultis also spent considerable time discussing how the Tennessee state government wastes taxpayer money. He cited a notable incident where, because the government wanted to rebrand their logo, they spent fifty thousand dollars hiring a graphic design consultant to redesign the logo despite already having ten graphic designers on government staff. This is just one example of the types of waste the Beacon Center found in its annual government waste watchdog reports.

Finally, Shultis took questions from the audience. One of the students asked, “What are some emerging issues you find exciting?” In response, Shultis  explained how as technology evolves faster and faster, governments will have a difficult time keeping up as government bureaucracy is “inherently slow and inefficient.” This inefficiency creates waste and can impede growth and private sector innovation. He explained that one of the solutions to this emerging issue that excites him is the concept of regulatory sandboxes. Regulatory sandboxes allow for new products and businesses to test their ideas in the marketplace without being subject to strict regulation.  Shultis illustrated how the leniency of regulatory sandboxes will spur innovation by discussing the case of the state of Wyoming. Wyoming was the second state in the country to create a fintech sandbox with the Financial Technology Sandbox Act. This law allows innovative fintech companies to test products for up to two years, with the possibility of an additional year extension, before having to apply for a formal license. Now, the cryptocurrency sector in Wyoming is booming. On the other hand, according to Shultis, cryptocurrency investors are discouraged from investing in New York because they have to undergo the tedious process of obtaining a Bitlicense. In this rapid, technologically driven world, it’s important to examine how governments can quickly adapt to changing technologies to help people make a living for themselves and create great ventures for society. 

The Beacon Center works tirelessly to hold the Tennessee state government accountable for wasteful spending and excess regulations. Throughout this event, Shultis stressed the importance of smart regulation and responsible government spending that is conducive to innovation and entrepreneurship in the private sector. Libertarian principles act as an important check on government spending regardless of whether one fully agrees with its philosophy. In a time when many spending bills are being considered at the federal level, it is important to critically examine the implications of government spending and regulation. 

Photo by Jeremy Bishop on Unsplash