The Hedgehog and the Fox: A Regulatory Parable








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The Hedgehog and the Fox:
A Regulatory Parable
December 2013
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An enticing poetic fragment from the 7th Century BCE leads me to consider the relationship between the Consumer Financial Protection Bureau and its regulated entities. It was fun to write it!
I hope you enjoy the article!
President and Managing Director 
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The 7th century BCE Greek lyric poet, Archilochus, observed: "the fox knows many things, but the hedgehog knows one big thing." Twenty-two centuries later, Erasmus transliterated Archilochus's dictum by precisely rendering it into the Latin aphorism: "multa novit vulpes, verum echinus unum magnum." When it comes to these two ways of thinking and acting, things didn't change much between the 7th century BCE and the 16th century CE, when Erasmus penned his elucidation.

Isaiah Berlin, the British political philosopher, whose life span stretched nearly the whole 20th century, wrote a well-known essay in 1953, inspired by Archilochus's apothegm. It was entitled "The Hedgehog and the Fox: An Essay on Tolstoy's View of History."

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Of Berlin's essay, Arnold Toynbee, one of the great historians of our time, wrote: 

"This fragment of verse by the Greek poet Archilochus describes the central thesis of Isaiah Berlin's masterly essay on Tolstoy, in which he underlines a fundamental distinction between those people (foxes) who are fascinated by the infinite variety of things and those (hedgehogs) who relate everything to a central, all embracing system."

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Since its inception, it seemed clear to me that the Consumer Financial Protection Bureau (the "Bureau") is a hedgehog. It tends to view the world through the lens of a single defining idea: consumer financial protection. In accordance with this idea, the Bureau exercises this vision through a single, predominant, and coherent framework of regulations. As a hedgehog, the Bureau stays focused on this one foundational principle and repeatedly, unvaryingly, and rigidly seeks to implement that overriding proposition by applying the same methods and solutions, usually to the exclusion of other possible remedies. 

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