[Charles] Murray’s proposal is less dramatic and more ingenious. The regulatory state has two related weaknesses, he explains: It relies on voluntary compliance, and its enforcement capabilities are far inferior to its expansive mandate. So he proposes a private legal defense fund — the “Madison Fund,” honoring the father of the Constitution — that businesses and citizens can rely on for representation against federal regulators. By engaging in expensive and time-consuming litigation on behalf of clients that refuse to comply with pointless rules, the fund drains the government’s enforcement resources and eventually undercuts its ambitions. The state can compel submission from an individual or company with the threat of ruinous legal proceedings, Murray writes, “but Goliath cannot afford to make good on that threat against hundreds of Davids.”I don't know the relevant American legislation, but first move of any government against this kind of initiative would be to allow the judge to award legal costs against the unsuccessful regulatory civil disobedient. Regulatory enforcement becomes a profit centre for the government rather than costly, and the state then turns libertarian-minded donors into money pumps.
The result Murray foresees is a “no harm, no foul” system, in which violations that cause no disruptions or injuries go ignored by regulators, because punishing them is too troublesome. He also imagines the rise of “occupational defense funds” in which trade groups pool resources to serve as a sort of insurance against regulators. In the unlikely event of a federal inspection of a particular business establishment, such funds could cover the fines.
Who pays for all this? Pointing to the emergence of “many billion-dollar-plus private fortunes over the last three decades,” Murray suggests that the Madison Fund could get started “if just one wealthy American cared enough to contribute, say, a few hundred million dollars,” or if “a dozen wealthy Americans cared enough to share the initial costs among themselves.”
Charles Murray must have something in his book showing how this wouldn't happen.