The Council on Wage and Price Stability has urged both OSHA and EPA to study the costs and benefits of the standards. It points out that lowering allowable noise from ninety to eighty-five decibels would cost industry $19,828 a person-a sum more than adequate to provide comfortable and effective personal hearing protectors. But cost apparently is not an important factor to federal regulators.

The lack of attention to the costs of regulation gives bureaucrats the opportunity to engage in all sorts of trivia. What size to establish for toilet partitions? How big is a hole? (It depends where it is.) When is a roof a floor? What colors to paint various parts of a building? How frequently are spittoons to be cleaned? The public's taxes actually support people who are willing to establish and administer regulations dealing with these burning issues.

Consider the plight of the small businessman who tries to deal with the Occupational Safety and Health Administration (OSHA) rules without paying for expensive outside assistance. The puzzlement over OSHA regulations extends to Chairman Robert Moran of the Occupational Safety and Health Review Commission, the independent agency created to hear appeals from rulings by OSHA inspectors. After citing one vague standard, he lamented:

What do you think it tells us to do?

I have no idea-and I don't think OSHA could tell
you either, before an inspection, citation, complaint,
hearing and post-hearing brief.

I submit that there isn't a person on earth who can be
certain he is in full compliance with the requirements
of this standard at any particular point of time.

The operation of the Occupational Safety and Health Act provides a pertinent example of how government regulation can lose sight of the basic objective. A company which invites OSHA to the plant to tell management which practices to revise to meet the agency's standards lays itself open to citations for infractions of OSHA rules and regulations. The law makes no provision for socalled courtesy inspections. To get around the problem, one regional office of OSHA has come up with a beautifully bureaucratic solution. They suggest that companies take photographs of their premises and send them to OSHA for off-site review. After all, if the inspectors do not actually "see" the violations, they cannot issue citations for them!

Conflicts among Regulations

The proliferation of government controls has, perhaps inevitably, led to internal conflicts. In some cases, the rules of a given agency work

at cross-purposes with each other. OSHA mandates back-up alarms on vehicles at construction sites. Simultaneously the agency, to protect employees against noise, requires them to wear earplugs that can make it extremely difficult to hear the alarms. More serious and more frequent are the contradictions between the rulings of two or more government agencies where the regulated have little recourse. Federal food standards require meat-packing plants to be kept clean and sanitary. Surfaces which are most easily cleaned are usually tile or stainless steel. However, these are highly reflective of noise, and may not meet OSHA noise standards.

A controversy over rest rooms furnishes another example of conflict among regulations; it also demonstrates that common sense is in short supply in the administration of government controls. The Labor Department, carrying out its weighty responsibilities under the Occupational Safety and Health Act, has provided industry with detailed instructions concerning the size, shape, dimensions, and number of toilet seats. For well-known biological reasons, it also requires some type of lounge area to be adjacent to women's rest

rooms.

However, the EEOC has entered this vital area of governmentbusiness relations and requires that male toilet and lounge facilities must be equal to the women's. Hence, either equivalent lounges must be built adjacent to the men's toilets or the women's lounges must be dismantled, OSHA and state laws to the contrary notwithstanding. To those who may insist that nature did not create men and women with exactly identical physical characteristics and needs, we can only reply that regulation, like justice, must be blind.

Uncontrolled Power of Government Regulators

The instances of government regulators' waste and foolishness pale into insignificance when compared to the arbitrary power they can exert. To cite a member of the Consumer Product Safety Commission, "any time that consumer safety is threatened, we're going to go for the company's throat." That this statement is not merely an overblown metaphor can be seen by examining the case of Marlin Toy Products of Horicon, Wisconsin.

The firm's two main products, Flutter Ball and Birdie Ball, were plastic toys that originally held plastic pellets that rattled. This led

the FDA in 1972 to place the products on its ban list because it feared that if the toys cracked, the pellets could be swallowed by a child. The company recalled the toys and redesigned its product line to eliminate the pellets, thus entitling the toys to be removed from the ban list.

The Consumer Product Safety Commission in 1973 assumed responsibility in this area. Because of an "editorial error," it put the Marlin products on its new ban list. Apparently the commission had incorporated an out-of-date FDA list. The error was called to the commission's attention; it replied that it was not about to recall 250,000 lists "just to take one or two toys off."

Marlin Toy Products was forced out of the toy business and had to lay off 75 percent of its employees due to the federal error. It is ironic to note that the commission specializes in ordering companies to recall their products if any defective ones have been produced, but refuses to recall its own product when there is a defect in every single

one.

A more amusing instance of the CPSC's failure to abide by its. own standards involves the toy safety buttons which it intended to distribute in the fall of 1974 in an effort to make consumers more safety conscious. Only after producing 80,000 buttons did the commission learn that its product was dangerous to children because of the lead paint and the possibility of pieces of the button breaking off and being swallowed. Unlike the procedures that it expects of the companies it regulates, the commission presumably ran its tests after, rather than before, production. Fortunately, since it realized its error prior to public distribution of the buttons, "only" wastes of resources and tax dollars were involved.

Rampant Bureaucracy Threatens Business

Except by anarchists, it is universally believed that the role of government is to establish the rules for the society. Government can and should act to protect consumers against rapacious sellers, individual workers against unscrupulous employers, and future generations against those who would waste the nation's resources. Yet the new wave of government regulation of business extends far beyond these sensible considerations; wittingly or not, it is changing the locus of decision making and of responsibility for a large portion of private

sector activities. Liberals and conservatives alike should be concerned about what is tantamount to a second "managerial revolution."

The first such revolution was noted by Berle and Means more than four decades ago and given the title by James Burnham a decade later. These analysts were referring to the divorce of the formal ownership of the modern corporation from the actual management. The revolution now under way is a silent bureaucratic one during which the locus of much of the decision making in the American corporation is shifting once again. This time the shift is from the professional management selected by the corporation's board of directors to the vast cadre of government regulators that influences and often controls the key decisions of the typical business firm.

This revolution is neither deliberate nor violent. But a revolution it truly is, for it is forcing a fundamental change in the nature of our industrial society. Extending the analysis of Berle, Means, and Burnham to the current situation, it is not who owns the means of production but who makes the key decisions that is crucial in determining the relative distribution of public and private power.

To be sure, the process is far from complete, and it proceeds unevenly. But the results to date are clear enough. Increasingly the government is participating in and often controlling the internal decisions of business, the kinds of decisions that lie at the heart of the capitalist system: What products can be produced? Which investments can be financed? Under what conditions can products be produced? Where can they be made? How can they be marketed? What prices can be charged?

Virtually every major department of the typical industrial corporation in the United States has one or more counterparts in a federal agency that controls or strongly influences its internal decision making. When we examine the sector of industry that already is most subject to government supervision-defense production-the results are disconcerting. It is precisely the companies that are most heavily dependent on military contracts that report some of the largest cost overruns and greatest delays. The society does not get the benefit of efficiency and innovation expected from private industry. Liberals and conservatives alike should be repelled by the ultimate consequences of governmental assumption of basic entrepreneurial and management functions.