In The Seen, The Unseen, and The Unrealized by Per L. Bylund, Bylund discusses government regulations and their affects on the economy, both directly and indirectly. Reflecting back and expanding on Fredrick Bastiat’s The Law, Bylund explains both the seen and unseen results of regulations and their effectiveness. One point in Chapter 7, Taxation and Regulation, that I found particularly interesting was Bylund’s view on the effectiveness of regulations vs incentives by the government.
Bylund starts by discussing how the government may put into place regulations to prevent certain business activities from occurring that the government does not approve of or they deem harmful in any way. Bylund uses Adele the apple farmer as an example, explaining all the different ways she could potentially get around government regulations pertaining to her orchard. Bylund makes a point regarding ineffective regulation stating “It is intended to do something - to have some effect - which means it must also change something. Ineffective regulation fails to bring about change, and therefore has no effect” (Bylund 102). An alternative that Bylund brings up are government incentives to promote a certain way of business, and rather than businesses trying to change their ways to avoid a penalty, they are encouraged financially to conform to the way the government deems appropriate.
One real life example of this and its effectiveness is real estate investing and its tax incentives. In the 2016 and 2020 election, many people were eager to look Donald Trump and his tax records after reports came out that he paid next to nothing in taxes every year, despite being a billionaire. Many Democrats saw this as unconstitutional, and that Trump was committing tax fraud in some sort of way. In reality, it was because of the huge tax incentives that the government hands out to entrepreneurs that enter and develop real estate. These are not loopholes, as many other countries offer the same incentives that the United States does. Rather, this is the governments way of incentivizing citizens to go into real estate because it spurs the economy. In this case, regulation penalizing for not going into real estate would be extremely ineffective and absurd, so incentives were the solution. This is one of many examples of how government incentives can be much more effective in producing outcomes the government desires than ineffective regulation.
Through Bylund's in-depth examples, readers are able to comprehend the concepts Bylund is trying to teach. I really enjoyed reading the chapters assigned because of how easy it was to follow along, as opposed to Road to Serfdom or The Law.