It seems that all of our industries have regulation problems. Despite what you believe to be the cause, the regulations installed by our government have been letting big problems slip through the cracks. The BP oil spill occurred due to the government turning a blind eye on safety violations.

We’ve had numerous salmonella outbreaks and car recalls. The Japanese government’s failure has resulted in, although overblown, nuclear meltdown concerns. The financial crisis could have been prevented if someone pointed out the impending doom of sub-prime equity. Sure, Peter Schiff, Ron Paul and other libertarian nut jobs published multiple books warning us, but that’s irrelevant.

But you know what? I don’t blame the governments. I’ve gotten tired of blaming the common lawyers and local heroes for problems with our food, drilling safety, reactor engineering and complex financial systems. Politicians run for office because they want to “help people,” not read through thousands of pages of esoteric manuals and texts designed for patent lawyers and scientists. It shouldn’t be their job; they’re not good at it.

So what are we to do? More of the same government regulations appear to be the motto of the left while the right complains that regulation hurts business. Not surprisingly, I think both are wrong.

The Republicans are right in a sense that regulations do hurt businesses by forcing them to spend time and money to ensure quality and safety. I agree that the free market makes government regulation irrelevant, but I believe this is because it manifests itself into private regulation.

People don’t want to worry about food or water being safe when they buy and consume it. Yes, competition will kill companies that end up killing their consumers, but I think private regulation will be created in order to avoid intensive circumstances. After all, that’s why we have government regulation.

So how would third party private regulation work? I imagine that it would be a combination of the Bureau of Better Business and current government regulations. The BBB allows consumers to report problems and makes neutral decisions on claims. This, in additional to in depth specific inspections, allows such an entity to label business and products with their own seal of approval.

Of course these services will require a fee, but any loss will surely result in higher consumer preference to your products. Do you grab the “100 percent Real Cheese” or unlabeled yellow mystery? This is how the free market establishes itself.

So why don’t the companies just bribe the regulatory companies? You’re right, they can. But it would be credulous to believe bribery, or similar actions that undermine regulatory effectiveness, do not currently occur. Again, my ideas may not be perfect, but they could be better than what we have.

So if private regulation plays the same role as public, why is it better? Private companies respond to competition. For the same reason why people choose higher quality products, consumers will opt for higher quality regulators. Corruption will still exist, but government is a lot better at denial, and they have more avenues to hide bribe money.

If we as consumers demand regulatory transparency, corruption will be even less effective. Consider a largely corrupted market, even a small sincere company suddenly gains the largest competitive advantage: honesty. Remember, we can always fire a company, but we can’t fire or vote against bureaucratic employees.