Tuesday, February 16, 2016

Why Regulation Makes So Little Sense

NOTE: I am trying to get all the links in my essays to point to copies of old articles contained in this blog. So I am reproducing this post from my now defunct "Random Notes" blog, as it is cited in "A Misleading 'Right to Know'", among others.

have been writing about regulation lately, but in one of my many trips through Wikipedia (this time without complaints... for now, anyway), I found a perfect example of how utterly worthless our massive, intrusive regulatory regime can be.

When the mythical "man on the street" is asked about labeling regulations, his general impression is that without such regulations, companies would label food any way they want. However, thanks to the federal government food must tell us precisely what is in it.

However, exactly how much of this is protection, and how much senseless meddling that conveys information to no one but the regulator? In other words, how much of our regulation is simply intrusive, costly meddling that conveys no information to the consumer, and thus serves no purpose but to employ regulators and inspectors and needlessly burden business?

Let's try a little test. What is the difference between "ham" and "ham with natural juices"? And how do they differ form "ham - water added"? And from "ham and water product"? And what is the difference between a "ham and water product" and "ham, chunked and formed"?

Can't answer? Then why do we mandate that each of those different descriptions only be used for a specific type of ham? If it conveys no information to the consumer, what is the purpose? Granted it employs inspectors, and imposes costs on the manufacturers, but if the consumer receives no information from the labels, then what is the point of mandating specific words?

And that is the problem with much of our regulation, it is the triumph of form over substance, yet no one involved realizes it. The regulator, having spent ten or twenty years living with these distinctions, thinks of them as perfectly clear. Even the manufacturer, having to deal with these categories, may think them meaningful. But the consumer, for whose benefits presumably the rules exist, gains no benefit. In other words, there is simply no reason for all these rules, and, other than employing government workers, there is no benefit from them.

And this is not true about food labels alone. Many, many regulated fields contains similar senseless rules. Many states have licensing tests for various professions which contain what could be most charitably be called trivia. Asking barbers the names of the bones in the skull, for example. There is no reason for such questions except that they require those wanting licensing to undergo formal training, though how training in such trivia makes anyone safer is beyond me. Yet no one things to ask why the rule exists, or ever existed. 

Of course there are many other arguments against regulation, but this one is so obvious, I am surprised it has been raised so rarely. Often laws are passed because they sound good. Who could argue with meaningful labels on food? The only problem is the fine sounding legislation often, in practice, degenerates into the farce we have here, where labels convey information, but no one outside of the regulatory apparatus can understand the information it conveys. 

Now many argue that, while it may not convey as much information as it should, regulation at least keeps producers from lying. But that is false. Laws against fraud, which have existed for centuries, keep producers from putting false labels on their products. True, in the past many were not prosecuted, and some terms are ill defined and so fraud is hard to prove. But that does not mean we should implement a massive regulatory scheme. Just as gun crimes call out for prosecution of criminals, not gun control, fraudulent labels call out for prosecution, perhaps legal definitions of some ill defined terms, but nothing more. A massive regulatory scheme is a clear over reaction to a relatively simple problem.

Then again, the start of the 20th century was the age of big government solutions. It was the era when banking problems caused by earlier government meddling lead not to free banking but to nationalization, when the ills of government subsidized rail led to ever more government interference, and, inevitably, when some unprosecuted abuses in the food industry led not to prosecutions but massive government interference.

And sadly, it seems the open of the 21st century is much the same.

POSTSCRIPT

For those curious about the answers to my questions, here is a quote from wikipedia:
Fresh ham is an uncured hind leg of pork. Country Ham is uncooked, cured, dried, smoked-or-unsmoked, made from a single piece of meat from the hind leg of a hog or from a single piece of meat from a pork shoulder. Smithfield ham, a country ham, must be grown and produced in or around Smithfield, Virginia, to be sold as such. For most other purposes, under US law, a "ham" is a cured hind leg of pork that is at least 20.5% protein (not counting fat portions) and contains no added water. However, "ham" can be legally applied to such things as "turkey ham" if the meat is taken from the thigh of the animal. If the ham has less than 20.5% but is at least 18.5% protein, it can be called "ham with natural juices". A ham that is at least 17.0% protein and up to 10% added solution can be called "ham—water added". Finally, "ham and water product" refers to a cured hind leg of pork product that contains any amount of added water, although the label must indicate the percent added ingredients. If a ham has been cut into pieces and moulded, it must be labelled "sectioned and formed" or "chunked and formed".
Clear as day, isn't it?

Originally posted in Random Notes on 2009/02/05.


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