The Cost of the Unseen
Through Chapters 5 in Bylunds book, he expands further on what is seen and unseen in the economy. He further dives into what the effects are, and how they play into the economy at large. Through his examples, we see how regulations take effect on these consequences.
Regulations
Regulations ultimately can have intended consequences and unintended consequences. Bylund states that the purpose of these regulations:
…is to change completely or influence behavior in some specific way to thereby cause a different outcome of the production and activities that take place in the market. (Bylund, 2016, pg.102)
Through this quote, Bylund is explaining the effect of regulations on innovation, economic growth and much more. I believe he does this to show how touchy regulations are, and how long the effects will extend. They must be thought through many different economic scopes in order to have the best possible outcome on the people and the health of the economy. Regulations are necessary for a changing economy to operate and so must be put in place with some expectation of how they will affect the future. That being said, the future is unknown and the economy is a process that continues to change.
There are regulations that are effective, but also regulations that are ineffective. He explains that the way these are measured is through the actions of people. To my understanding if a rule is good, it will benefit the way people behave and therefore cause more positive effects. The people that these regulations often have the largest effects on are entrepreneurs. Good regulations have the power to inspire entrepreneurs and increase innovation. Through this one can then assume that a bad regulation is one that does not cause people to do anything different, or worse causes negative repercussions. One conclusion that was also derived through this reading was that regulations impacts are hard to track. This was gathered through the example of apple production in an orchard. This story in the book helped further explain the complexity of regulations and how delicately they must be enforced.
Taxation
Taxation is another way that the government has effects on the economy. A policy maker may believe that an increase in taxation will help decrease poverty. However, there are other forces that are unseen and play into these effects. The taxation may cause worse effects on the economy than before the regulation was enforced. The methods of pushing for these regulations also need to be accounted for. Some hope to reverse a bad situation, while others are to help an already enforced beneficial regulation. Ultimately it is up to the policy makers, and what they believe will have the best possible outcome.
Barriers to Entry
Regulations with good intentions in mind, can also have a very negative impact. One impact that can result is further barriers to entry in the market. This is seen through how it specifically affects entrepreneurs. If a rule with good intention ends up hurting an area of production, a gap can be formed in the economy. Legal barriers are expected to come with regulations, however they also affect competition. A negative effect on market competition leads to less selling and production overall, and less economic value. The effects of regulations are tricky, as one bad effect can create numerous worse effects through working people. Through Bylunds example of the nail maker, one can see how business are affected directly by regulations. (Bylund, 2016,)
The Seen
Through the title the seen, and the unseen, I believe that the scene Bylund is referring to is the statistical effects from a regulation that can be noted and used for statistical evidence. Meaning that the unseen, is what they do not account for. The unseen is the future long term effects of a regulation and the entrepreneurs role in society. Entrepreneurs are vital to economic growth, and often overlooked when accounting for new regulations. Through ignoring the unseen, unrealized consequences will have a negative effect on the economy as a whole. This includes supply and demand, production, unemployment and employment rates.. ect
Through chapter 5 and 7 of Bylunds book, I believe he is giving a warning of the cost of regulations. They affect the entrepreneurs specifically, and can have large ripple effects on the economy. It is important to not just look at immediate results with taxation and regulations, but long term results as well. By not considering the entrepreneur and their contribution, they are not taking account for the unseen.
References
Bylund, P. L. (2016). Chapter 5: The Seen and the Unseen. In Seen, the unseen, and the unrealized: How regulations affect our everyday lives (pp. 73–82). essay, Lexington Books.
Bylund, P. L. (2016). Chapter 7: Taxation and Regulation. In Seen, the unseen, and the unrealized: How regulations affect our everyday lives (pp. 99–115). essay, Lexington Books.
I agree that regulations
Regulations affect everyone either directly or indirectly. It is important that they are thought out thoroughly due to the possible affect they have on a society. One wrong regulation and it could cause a downfall of a society that would be hard to bounce back from. However, regulations are necessary for growth. If there were no changes the economy would become stagnant and eventually roll over. Changes keep the economy on its toes and help grow and expand the market. With that being said, like you stated, some regulations are effective and others are ineffective. This is based off of the individual. If the society finds the regulations to be positive they will take the regulation into action, making it more effective. If people disagree with the regulation, they would not follow through with it, making it more ineffective. I agree the regulations mostly affect entrepreneurs, either helping them renovate their product, or hurting their production process. Just like regulations, taxation is another way the government can put effects on the economy. I agree that raising taxation to help decrease may not be the smartest decision. Sure it might look good on paper but there are many unseen effects that occur that may not be so beneficial. I have not yet thought about regulations and barriers to entry. I agree that all because a regulation has good intentions behind it does not make it have a positive impact. It is hard to say weather or not a regulation will have a positive impact which is what makes them so important. I agree that the unseen part of the economy are the long-term affects and also the back side, more forgotten, affects of decisions made. However, for the economy to continue to grow in a positive way, the unseen must not go unaccounted for. For regulations to be beneficial, the government must account for the impact 5, 10 years down the line and adjust to those factors. Great article, I loved reading your thought process behind the material we read. It helped me expand my perspective when it comes to taxation and regulations and the impacts it has on a society.