[Guide to the Market Economy] Procrustes’ Bed and Elastic Standards

“Rubber-Band Regulations Are No Different from the ‘Bed of Procrustes’

If the Government Regulates Without Consistent Standards, Economic Activity Becomes Impossible”

Procrustes was a robber from Attica in Greek mythology. He would seize travelers passing by, drag them to his house, and lay them on an iron bed. If a person was taller than the bed, he would cut off the parts that extended beyond it and kill them. If a person was shorter than the bed, he would forcibly stretch them to fit the bed’s length, also killing them. Even those whose height matched the bed exactly had to die. That is because Procrustes’ bed had a device for adjusting its length. No one who lay on that bed could survive.

A Robber from Greek Mythology

Of course, there was supposedly a condition under which one could live if the bed and the person’s height were the same, but the bed’s length was entirely up to Procrustes. Therefore, no one in the world could ever conform to Procrustes’ arbitrary standard.

The expression “the bed of Procrustes,” which comes from this story, refers to forcing others to fit one’s own standards despite having no clear standard or even causing harm in the process. One of the main subjects criticized through the metaphor of “the bed of Procrustes” is the government. When the government, backed by overwhelming political power, imposes arbitrary standards—in other words, regulations—the market falls into confusion. This is a typical form of political failure. Then how can we restrain the government’s heavy-handed regulation, protect the market’s autonomy according to clear standards, and lead growth?

The solution can be found in the rule of law, which protects freedom and market principles. Article 11, Paragraph 1 of the Constitution of the Republic of Korea provides as follows: “All citizens shall be equal before the law, and there shall be no discrimination in political, economic, social or cultural life on account of sex, religion or social status.”

What Happens When There Are Too Many Arbitrary Standards?

The law provides a clear standard by which right and wrong in conduct can be judged. In particular, unlike capricious yardsticks such as the “bed of Procrustes,” which change depending on the situation, the law has the advantage of allowing rational and clear standards to be applied within the framework it sets. Therefore, the government must apply consistent standards in all cases on the basis of law, enforce them, and uphold the value of the law. This is precisely the rule of law.

What happens if the government does not follow the rule of law and instead applies arbitrary standards depending on the circumstances? People would be thrown into confusion, not knowing when, where, or which standards would be applied, and rather than devoting themselves to fair effort and competition, they would become absorbed in political infighting, tricks and maneuvering, reading the situation, and fence-sitting.

Once the government begins applying arbitrary standards either to favor someone or to punish someone, economic activities that had been recognized as lawful can suddenly be sanctioned as regulatory violations. The government may even create new rules and impose absurdly strict and severe sanctions only on a particular sector.

For example, it may impose disadvantages simply because a company is too large, or because too many consumers choose it. This may happen even though doing the exact same thing in another field poses no problem at all. If regulations are created without principle in this way, making something legal in one instance and illegal in another, it becomes difficult to engage in economic activity with confidence. This ends up holding back companies that are striving intensely to compete.

If a company chosen by many consumers earns large profits, other companies enter the market, imitate it, and take away those profits. In this way, a spontaneous order is formed in the market.

Companies Dislike Elastic Standards

Companies must, by their nature, compete and continuously devote themselves to developing new products and technologies. If they are bound by arbitrary regulations, free competition and progress cannot possibly take place. This ultimately leads to a decline in the quality of consumer welfare.

Imposing haphazardly created regulations without clear legal standards is neither fair nor rational. When regulations are applied, they must be based on clear standards and applied consistently. Regulations based on elastic standards inevitably lose trust and cause confusion.

In fact, what any company produces is ultimately determined by consumers through their purchases. For a third party to interfere in that process is to limit consumer choice and to force a political choice that departs from economic principles.

■ Please remember

The government must apply consistent standards in all cases on the basis of law, enforce them, and uphold the value of the law. This is precisely the rule of law.

Sung-no Choi, President, Center for Free Enterprise (CFE)

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Original title: [시장경제 길라잡이] 프로크루스테스 침대와 고무줄 잣대

Author: Sung-no Choi

Date: 2019-04-22

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=column&pn=14&idx=20114