The Unlikely Story of American Regulatory Socialism

Abstract

The conventional wisdom has it that US Democrats and those on the American left support incremental steps in the direction of socialism, if not an all-out endorsement of the concept. However, in at least one area—regulation—Republicans and the American political right have also, albeit unwittingly, spread the seeds of socialism not just in Washington, DC, but all across the world. This article reviews the history of federal regulation in the United States, and in particular the arcane, technical history of cost-benefit analysis (CBA), a tool that has become increasingly central in battles over regulation between the Left and the Right. Although right-wing political operatives latched on to CBA in the late 1970s and early 1980s, the tool has a long, complicated history, aspects of which could even be called socialist in nature.

Keywords: socialism, cost-benefit analysis, regulation, Arrow’s impossibility theorem, dictatorship

JEL Classification: B14, D61, D71, I31, K23, L51