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Three Cheers for Regulation!

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Last summer I had the extraordinary pleasure of teaching a course in American history to a group of Chinese scholars in Xi'an. They were a wonderful group of eager, inquisitive students who teach American studies in a variety of universities around China and my job was to give them an "enrichment" program so they could improve their own work.

We covered a wide-range of topics - from race relations to railroad construction; from the New Deal to the New Right. But what seemed to interest them most was a story I told about sausages.

More specifically, I told them about Upton Sinclair's 1906 book The Jungle. In it, Sinclair describes the horrific working conditions endured by the immigrants who labored in Chicago's vast stockyards and meat-packing plants. Along the way Sinclair also described what went into the sausage grinder: spoiled meat that had been returned to the plant; rats which accidentally fell into the vats; occasionally even a worker. A graphic novel in the true sense of the word, and I read some of these passages aloud to my students.

When it was published, The Jungle created a sensation. Americans were outraged, including, so the story goes, President Theodore Roosevelt. In response to the outcry he sent Federal inspectors to Chicago who concluded that actually Sinclair might have understated things. And as a result Roosevelt created the Food and Drug Administration, charging it with protecting the nation's food.

I told the story as a set piece in order to introduce the larger topic of Progressivism. Between the 1890s and 1920 Americans enacted a wide range of reforms to deal with the worst abuses of "laissez-faire" unregulated industrial capitalism, including child-labor laws, work-place safety laws and anti-trust legislation. But my students in Xi'an kept returning to the sausages.

"Are you afraid of the food you eat?" they asked me repeatedly. "Are you afraid of the food you feed your children?" And each time I replied: frankly, "no," and I suspect most Americans feel the same way.

I told my story about Sinclair's sausages before thousands of dead pigs floated down rivers in and around Shanghai, before rat meat was being sold as "lamb" in markets in the eastern part of the country. But my students had already lived through a dozen food scandals, most of which never made international headlines. Most of them had small children which made their anxieties about food safety even more acute.

The fact that I don't have to worry every day about the food I eat or the water I drink makes me lucky as compared to so many people in China and around much of the world. But it is more than just luck, of course. We don't worry because we have built a system of regulations which, while not perfect 100% of the time, has effectively taken the fear out of eating and drinking.

Regulating the economy is one of the things conservatives like to rail against the most - and they always have. When you listen to conservatives yell that government regulations are strangling the economy it is worth remembering that this is exactly what their predecessors said when Progressives fought to ban children from working in coal mines or when they sought limits on the number of hours people could be forced to work in factories.

Conservatives were wrong then, and they are wrong now. In fact, one reason economic regulation can be so easily attacked by its opponents is that it has become the victim of its own success. We simply take its results for granted -like meat that is what it says it is.

Perhaps the central fairy tale of conservative "free market" economics is that markets regulate themselves. They never have and they never will, and one would have thought that this particular bit of fantasy would have died with the financial collapse of 2007. Who can forget Alan Greenspan's testimony before Congress the following year when that Ayn Randian Free Marketeer expressed "shocked disbelief" at the failure of the financial sector to regulate itself?

A century ago, the unregulated economy resulted in the Triangle Shirtwaist Fire in New York City. The inferno that erupted there killed 146 people including two 14 year old workers. That industrial disaster, however, spurred New York State to pass a series of work-place safety laws that made conditions considerably better. By contrast after 14 people were killed earlier this month in the West, Texas fertilizer plant explosion, Texas Governor Rick Perry insisted that Texas didn't need any more regulations.

There are plenty of places around the globe where the private sector isn't burdened by regulation. Like Bangladesh, where under-regulated factory operations yield cheap clothing at the price of human life. Or China, where you can't ever be quite sure what you're eating and whether it will poison you.

After my class, as we were walking back across campus, one of my students tentatively whispered to me: "I think China needs a Progressive era." How ironic that some Americans would have us dismantle a system which makes so much of the world envious.

Steven Conn teaches history at Ohio State University. His most recent book is To Promote the General Welfare: The Case for Big Government (Oxford University Press).