Sunday, July 5, 2015

The Problem With Regulation

Anyone who argues that government regulation is beneficial, or protects us from unethical business, or the like, should read the Wikipedia entry on sodium cyclamate:
Controversy developed when, in 1966, a study reported that some intestinal bacteria could desulfonate cyclamate to producecyclohexylamine, a compound suspected to have some chronic toxicity in animals. Further research resulted in a 1969 study that found the common 10:1 cyclamate:saccharin mixture to increase the incidence of bladder cancer in rats. The released study was showing that eight out of 240 rats fed a mixture of saccharin and cyclamates, at levels of humans ingesting 350 cans of diet soda per day, developed bladder tumors.[5] 
Sales continue to expand, and in 1969 there were $1 billion in annual sales of cyclamate, which increased pressure from public safety watchdogs to restrict the use of cyclamate. In October 1969, Department of Health, Education & Welfare Secretary Robert Finch bypassed the Commissioner Herbert L. Ley, Jr. of the Food and Drug Administration and removed the GRAS designation from cyclamate and banned its use in general purpose foods, though it remained available for restricted use in dietary products with additional labeling; in October 1970 the Food and Drug Administration under a new FDA commisssioner banned cyclamate completely from all food and drug products in the United States.[6] 
Abbott Laboratories claimed that its own studies were unable to reproduce the 1969 study's results, and, in 1973, Abbott petitioned the FDA to lift the ban on cyclamate. This petition was eventually denied in 1980 by FDA Commissioner Jere Goyan.[7] Abbott Labs, together with the Calorie Control Council (a political lobby representing the diet foods industry), filed a second petition in 1982. Although the FDA has stated that a review of all available evidence does not implicate cyclamate as a carcinogen in mice or rats,[8]cyclamate remains banned from food products in the United States. The petition is now held in abeyance, though not actively considered.[9] It is unclear whether this is at the request of Abbott Labs or because the petition is considered to be insufficient by the FDA.
Now, think about this. The best evidence is based on a study where rats drank the equivalent of 350 sodas a day. From this evidence, it was banned. Since then, even this tenuous risk cannot be reproduced, even the FDA admits they cannot be reproduced, yet they continue the ban "just in case".

I argued in "Fear Driven Enterprises" and elsewhere that the government is driven by fear, and will always choose to ban rather than allow, as allowing a danger will create career ending bad publicity, while no one will know if something useful or beneficial is banned. Thus, the state will always be excessively cautious, to the point of actively doing harm by banning beneficial, and harmless, substances.

I shall write more about this later, but for now, I think this provides one of the best examples I have found. Even more so since even to this day the public mostly believe saccharine to be harmful, even though studies later demonstrated the risk was specific to the physiology of female rat bladders, a system with little in common with humans.


For those interested, my comments on the risks of regulation and consumer protection can be found in the following essays:  "Consumer Protection", "How the Government Corrupts Relationships", "Consumer Protection, Cartels and the Failure of Regulation", "Consolidation and Diffusion", "For Your Own Good", "Business Licensing and Regulation", "Inspections, Regulations and Bans", "Why "Hope for the Best, Plan for the Worst" is Bad Policy", "GMO Revisited - As Well as Hormones, Soy, Phytoestrogens, and a Host of Other Food Scares", "Gun Control, The FDA and Regulating the Law Abiding", ""Better Safe Than Sorry" Usually Leaves Us Even More Sorry, And Much Less Safe", "A Misleading "Right to Know"", "Oven Mitts and Safety Regulation"


  1. Inarguably the regulatory process can be fraught with unintended consequences, but the suggestion that we should or could eliminate all regulation is neither realistic nor ideal, IMO. The societal system we have depends on laws and courts to peacefully resolve disputes between people. That system would collapse from a crushing caseload if weren’t for laws and regulations that help to clarify things in advance. Even some of the most liberty-minded conservatives who campaign against over regulation never suggest doing away with it altogether. They wouldn’t be taken seriously if they did.

    You have said, essentially, that gov’t should not have this authority, as if somehow it is a usurpation of the people’s rights; however, in theory gov’t IS the people, and if the people wish to assert and uphold the right not to be placed at risk of lead poisoning, for instance, then I don’t see what’s to stop them from legitimately doing so. But what happens when gov’t is no longer acting as the representative of the people and the individuals in power abuse that power to impose regulations we don’t want, as we’ve seen happen again and again? That phenomenon is symptomatic of a larger problem, i.e. a divided population where people view the role of gov’t very differently. In that case the only remedy is for the side that feels over-regulated to do whatever it can to remove regulatory power from the hands of gov’t, giving us an all-or-nothing choice that will please hardly anyone. I don’t think the will is there to take such measures (and since I can’t recall any regulatory agency ever being disbanded I think the evidence supports that), but forcing the progressives to choose between no regulation or very limited regulation would be the only way I can think of to save us from this mess.

    1. I would disagree for one simple reason. I say that this sort of regulation is a violation of rights, and as such is simply unjust and improper.

      You argue for efficiency, but that is not a valid argument. For example, it would be more efficient to allow police to imprison those they suspect of crimes, and then let those who feel improperly imprisoned prove they were not going to commit crimes. It would doubtless reduce crime and improve order, but it is also unjust and thus not what we do. Similarly, making rules that prevent people from exercising their property rights and rights to contract is unjust, even if efficient by some measure.

      Nor do I care if no one else supports this position. Just because one is in the minority does not mean he is wrong. At various times completely false ideas were almost universally held, from the four elements to bodily humors to theories of possession. So I am not troubled being in a very small minority.

      I can make more of a case, and may do so shortly, but for now let me just stick with my original position that, whether efficient or not, it is unjust and an improper violation of rights. And, whether the majority supports it or not, the violation of rights is wrong. (By the way, I would argue you are wrong in arguing the system needs these regulations. Federal regulation was largely unknown prior to the Civil War era, and even after was very limited until between 1890 and 1917. There was heavy trade and industrialization, yet the world ran without federal regulation and the courts did not blow up. So I would argue your basic premise, though undoubtedly a popular argument, s wrong. Anyway, regulation does not remove things from the courts, if anything it ADDS court cases... Just check the federal case histories. So ending this sort of regulation would likely reduce court load, not increase it.)

      But I am starting to make those additional arguments, and I want to organize that a bit better, so for now I will let it go there. I shall write more later.

    2. >>”I say that this sort of regulation is a violation of rights…”

      I don’t know specifically what regulation you’re referring to but what “rights” do you think are being violated?

      >>”You argue for efficiency, but that is not a valid argument.”

      Efficiency, if that’s the term you want to use, is connected with justice in this instance, because if the courts are the means by which disputes are resolved and wrongs are righted, then that system must be made to run in such a way that it lives up to that promise. If your laws are so open to interpretation that every dispute must be resolved by a judge (and therefore delayed) and every judge can impose his personal interpretation so that there is rampant inconsistency in the way justice is applied, then justice is essentially nonexistent. That certainly seems inconsistent with the concept of liberty to me.

      >>”Nor do I care if no one else supports this position.”

      When someone writes multiple, lengthy, thoughtful posts on a subject I typically assume that their goal is to persuade others to adopt their point of view. That’s why I put the effort into reading and responding. If you sincerely don’t care whether I or anyone else supports your position, then let me amend my comment to the following:


      I’m not going to take up your time debating these ideas if you don’t care what I think.

      >>”Just because one is in the minority does not mean he is wrong.”

      It’s not a matter of right and wrong, as long as no one’s Constitutional rights are violated.

    3. OK. I suppose it all depends on what you mean by regulation, but if you mean any sort of a priori restrictions on what business an be transacted, say implied warranties or minimum wages or regulations concerning stock sales, then both property rights and the right to contract are being violated.

      I would also differ with you on "if it's constitutional it's ok" argument. Until the late 19th century most of our federal regulations would have been unconstitutional, and some as late as 1934. The problem is "unconstitutional" is a moving target. Not one of the founders (ok maybe Hamilton on a really bad day) would have supported the Federal Reserve, for example, or most of our modern regulatory apparatus, but they are now considered completely constitutional, thanks to a broad reading of the commerce clause -- a reading Madison explicitly rejected. So I would argue, at least according to those who wrote the constitution, all of the regulations we have today are unconsitutional.

      Then again, I am not sure that is a good measure. If tomorrow they passed an amendment saying all rights were void, then any law would be constitutional. That is why I speak of rights, not of constitutionality.

      As far as saying I did not care about being in a small minority, I was not saying I did not wish to persuade others. I was simply responding to your first statement, where you made what sounded like an appeal to authority saying (in effect) "not even the most extreme conservative wants to do away with all these regulations". My point was, I don't care if no one in authority sees things this way, that does not mean it is wrong. That was my point there.

      As far as inconsistency, I would argue our vaguely worded regulations (eg antitrust) and appointed administrtaive courts are far more inconsistent than courts would be which respected the right to contract and enforced based solely on the agreement, rather than on a mass of sometimes contradictory and often unintelligible federal regulations.

      You often speak as if I would have no laws if I did away with regulation, and that is absurd. The standard felonies (murder, rape, robbery, assault, battery, theft, arson, etc) would still be crimes, and civil law would still respect contracts as written. And, in those cases where strangers did one another harm, torts would still apply (though nowhere near as broadly as today), so what would be so unworkable and evil about my ideal state? Adults would be treated as adults and left to decide things for themselves, and rights would be protected. So where is the harm in this? Is eliminating minimum wage and rules defining what ham is and laws eliminating supposed monopolies and fixed prices for utilities and government created cartels and monopolies a bad thing?

      As I said, I should put it together better, as I am meandering all over. And I should also make clear this is my ideal. Realistically (and even that is unlikely) the best mid-way step woudl be to eliminate all these federal regulations and let each state do its own regulating/legislating, so we could see if those who reduced the number had any ill effects. In that way, I like to think, we could see my point is valid, as states which regulate less and less enjoy an influx of people and a growth in prosperity.

      Sadly, as long as we have federal regulations, forcing one answer on us all, there is no way to test which answer is best, nor for those of us who want less regulation to escape it. Everyone must abide by a single solution. So, for an interim step, I would ask only that we move these laws from the federal government to states, or even smaller localities, and allow people to have a little choice in how much government interference they have in their lives.

    4. Again I would agree with much of what you said, Andrew. The federal gov’t shouldn’t be in the business of regulating anything not specifically authorized to it under the Constitution. The states theoretically have much broader power to regulate, depending upon their own constitutions. When I say, “in accordance with the Constitution,” I am of course referring to the Constitution as written and intended by the Founders. I know it’s been abused to the point of unrecognizability but that doesn’t mean it isn’t still the goal that we should shoot for. As for something like minimum wage laws, I completely agree with you that the gov’t has no authority to make such laws. Minimum wage laws are an example of mob rule masquerading as proper law.

      Rights are a hard thing to define, as evidenced by the fact that I think anyone I’ve ever spoke to on the subject has a different way of defining it. The Founders took the view that rights had to do strictly with the preservation of individual liberty (including property rights), and the Constitution and Bill of Rights were written in that vein. It is the natural way of people that as a population grows, more and more rules will be written in order to strike the balance between the different perceptions of liberty. In the micro-society that is your home, right now you set the rules in your household for you and your son. If you got married suddenly there would be another person whose comfort had to be considered and presumably you would agree to certain unwritten rules that may not be 100% to everyone’s liking but where each of you still retained enough freedom that on balance it was preferable to be together. If she had children as well there might be even more rules. Same is true for a business, a ship, a church, a town and any other venue where people interact for a common purpose. The more people there are, the more rules there will naturally be. That’s human nature. You can’t live your own life by human nature but demand that others defy their own natures. Life doesn’t work that way. Therefore, we can expect that as societies grow so will the number of rules and regulations and that’s not unreasonable; however, to keep on the path set by the Founders, laws should always be for the protection of individual liberty. If we stuck to that general rule, we wouldn’t see laws like minimum wage standards, because that not only doesn’t preserve liberty, it impedes it. Same is true for Social Security, Medicare, Medicaid, and a million other laws and programs put in place by the federal gov’t. The fact that all these things exist in spite of the Constitution and its clear intent brings us to a second reality that always gets lost in these discussions, which is that any law – including the Constitution – is only as good as our willingness and ability to enforce it. Natural law in which might makes right will always supersede any manmade construction, which is why I find these arguments (not just with you but with pretty much everyone) to be interesting but frustrating. The mob will rule in the end, and that was okay when the mob had a conscience but as the Left has expanded its influence that is less and less the case.

    5. I think I see where we disagree and why we will always do so. Not only do you seem to be somewhat in agreement with the "necessary evil" theory which I reject, but you also have a fairly negative view of mankind. Now, I am not unduly optimistic -- after all, my father was a police officer all his life, so I grew up distrusting most people as my default reaction -- but as time has gone on, while I believe it is relatively easy to mislead people, and that people can be induced to do horrible things, or even convince themselves out of mistaken beliefs that horrible things are right, I do believe people can also be led to do the right thing, we just need the right circumstances.

      Given my beliefs, that government is not evil or good, simply a tool that can be misused, the way a gun can be used to defend or murder, I also believe there are a set of rights which are consistent with a properly functioning government. We seem to differ on this a bit, as you seem to argue sometimes "rights" are an arbitrary construct, and only exist because we put them in the constitution, while I believe the rights elaborated upon there are the necessary foundation for a government to operate properly, and not merely an arbitrary set.

      For the same reason, I believe if a government is properly organized, and people come to see the benefit of the same, over time, a localized government, with representative government and freedom of movement, along with protection of those essential rights -- even one which starts as far from true freedom as ours or even farther -- will tend over time toward a free government close to my ideal.

      One problem we have now is, given how much is centralized, there is no way to observe the effects of different approaches, and thus the government can make laws and then claim every success is due to them, and every failure a fluke. With 50 different laws, or more, it would be harder to hide the damage of bad laws, and over time people would see the benefits of removing bad laws. (It is not perfect, much like the free market, a federal government tends toward the ideal but probably never reaches it, as changing conditions introduce new areas in which one must find the right choices. Still, just as with the free market, bad as a minimal federal government would be, it is better than all the other choices. Unless, I suppose you are the dictator in your state, then maybe you might enjoy less freedom, though dictators do tend to live uneasy and often short lives. And have few friends they can trust.)

      This may actually make an interesting essay, the role of assumptions in the way one views government, progress, the future, etc. Not that I haven't written about it before, but mostly about how our youth obsessed, change obsessed, solipsistic, narcissistic neo-Romantic philosophy drives current trends, so looking at other beliefs may be of interest as well. (Oh, I did do some on the more authoritarian social conservatives, and on "paleo-cons" and how little their views differ from the left in many essentials, but still, lots more to cover I suppose.)

      Anyway, it is interesting to look at how other people see these things. Why else would I bother not only writing so much, but also replying to comments, and, in my free time, reading sites that range from libertarian to paleocon to neocon to socialist to liberal to anarchist to communist and beyond. I find it fascinating to see what unspoken (or sometimes explicit) assumptions lie behind each way of seeing things, as well as what implications they have for other beliefs, whether those holding those beliefs recognize them or not.

      Well, getting late, and feeling a bit poorly tonight, so doubt I will catch up on my writing yet, but my son is with his mother one night this weekend, so maybe I will get some writing done then. If I don't use it catch up on sleep lost on vacation, and then catching up when I got back to work.

      We shall see, I suppose.