Words Matter: Regulation vs Regulation

Words matter.  Although Lewis Carroll’s Humpty Dumpty was perhaps wrong to claim that words meant what he wanted them to mean, it’s still helpful to remember that sometimes people mean different things.  This may be so with the term “regulation.”

“Regulation” as Oversight  As a former regulatory bureaucrat I always thought of “regulation” as meaning that some part of the government gets to tell someone not in the government (a “private actor”) what he or she must or may not do in some specific context.  The Federal Aviation Administration is a great example of a regulator.  It tells builders and operators of aircraft what they must or may not do via certificates, regulations, orders, exemptions, and a host of other regulatory mechanisms; and that’s just on the aviation side.  On the space transportation side of the agency, the FAA regulates launch, reentry, and non-federal spaceports, including those operated by states.

The FAA issues regulations through rulemaking.  If a private actor violates one of the agency’s regulations the FAA may impose fines in the form of civil penalties or revoke the private actor’s authorizations to fly or build an aircraft or launch a launch vehicle.  I long thought this was what everyone meant by regulation.

“Regulation” as the Rule of Law.  I think I was wrong.  In the past year or so I’ve heard other references to regulation that left me quite puzzled at first.  They did not apply to some part of the executive branch telling the private sector how to conduct itself.  Instead, these people spoke of regulation more as a sort of order.  Some wanted regulation and title to protect property rights.  Investors wanted regulation for certainty, so they would understand the lay of the land.  When questioned more specifically, some investors turned out to want rules of the road, not a series of authorizations and rules.  (Others, by the way, the ones who wanted what I think of as regulation, stressed they did not want a lot of it.  That was bad for business, too.)

This broader use of the term regulation suggests that people want to understand what law applies.  Specifically, the question of certainty over property rights appears to loom large.  That concern I understand.  If a private actor spent a fortune and decades of his or her life getting to the Moon, that person might worry that the investment might not be protected by the rule of law out where no nation has sovereignty.  After all, how will two private entities handle disputes when they both lay claim to the same patch of ice on the Moon?  Who will decide such disputes?  What law will apply?  What if another country wants to claim the lunar village you just finished building?

Words of Caution.  These are important questions.  The critical thing is not to mix the questions up with regulation, “real” regulation, if I may be allowed to call it that.  Assigning some agency in the federal government to authorize lunar roving does not address the questions of how to tell who owns what, how to handle disputes, how to ensure that no one takes someone else’s hard work, or what law will apply.  Those people looking for rules of the road should avoid asking for regulation.  They should be more specific and say they want certainty about property rights or the rule of law.  If they ask Congress for “regulation,” they’ll get it.

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