Tracing consequences both seen and unseen.
Eric D. DixonTo Protect and Subvert
Posted at 12:42 am on January 24, 2012, by Eric D. Dixon

Public choice article of the day, from The Atlantic:

Roughly 70 percent of all antibiotics used in the United States are given to healthy farm animals to foster rapid growth and make up for unhygienic living conditions. Many bacteria that live on animals adapt and transfer to humans, spreading superbugs that are often resistant to treatment.

For more than 35 years, the FDA has recognized that giving antibiotics to farm animals poses a risk to human health, yet the agency has done almost nothing to stop it. Indeed, it has mastered the art of making inaction look like action. Last May, NRDC and our partners sued the FDA to prompt it to take action. Instead, the agency retrenched.

It started by claiming the livestock industry could police itself. In our lawsuit, we asked the FDA to finally rule on two citizen petitions — one filed 12 years ago, the other six years ago — urging the agency to stop the use of antibiotics in healthy animals. In November, the FDA announced that although it shares concerns that the use of antibiotics to make animals grow faster is dangerous for humans, it would deny the petition because it was pursuing an alternative strategy.

This “alternative strategy” turns out to be just another name for the status quo. Instead of banning the use of antibiotics in healthy animals, the FDA is allowing the livestock industry to follow a voluntary approach. But we already know voluntary doesn’t work. The FDA has been operating under that model since 1977, yet the practice has expanded exponentially over the years. Talk about the fox guarding the hen house.

In December, the FDA tried to further justify its inaction by erasing the historic record. Back in 1977, the agency proposed to withdraw approval for the use of several antibiotics in animal feed based on findings published in two notices posted in the Federal Register. The notices containing the findings have been listed in the Federal Register for more than three decades. But just before Christmas a few weeks ago, the FDA pulled the notices. Soon after it buried its 35-year-old proposal, the agency tried to have it both ways. On January 5, it proposed banning off-label uses of a class of antibiotics known as cephalosporins on healthy livestock.

To be clear, although I’d like to avoid the consumption of antibiotic-treated livestock as much as possible, I don’t think the FDA should ban it — a clear overreach of government power.

FDAThe lesson here, though, is that when a government agency is tasked with protecting the public interest, public-sector incentives make it a near certainty that the agency will eventually instead collude with special interests in working against the public interest. Instead of serving the one function that is clearly useful for industry oversight — education and advice to consumers who can then make a more informed choice — the FDA has become a legal arbiter of illusory safety.

If the FDA allows a product or practice, the public at large regards it as safe. If the FDA disallows something, society assumes danger. But instituting a top-down decision-making process to centralize the level of risk that consumers should be allowed to take leads to a system that serves nobody well. Life-saving drugs are barred from being used by people who are more than willing to accept their potential hazards. The sale of healthy food is criminalized because of the mere possibility that it could make somebody sick, despite the fact that people can and do get sick from the FDA-approved alternative. And, as shown in The Atlantic, because people trust that D.C. paternalists are looking out for them, they carelessly consume anything that the FDA has let slip through its otherwise iron grip.

A bureaucratic overlord is incapable of choosing the correct balance between risk and reward even for the people in his neighborhood, let alone for more than 300 million strangers scattered throughout the country. There is, however, an alternative, as Larry Van Heerden noted in The Freemam:

The first step to correct these problems is to abolish the FDA, stripping the government of the power to approve drugs (and medical devices) for the market or to remove them from the market. Any rule-making for disclosure and lawsuits for fraud should be devolved to the states.

Even if the FDA were omniscient, objective, and impervious to outside influence, it would be wrong to give it the power to withhold drugs from the market. The proper function of government is to protect individual rights and guard against fraud, not to restrict freedom of choice to protect people from their own ignorance. In fact, the FDA has shown itself to be imperious, subject to prevailing political winds, and indifferent to the thousands of deaths and injuries it has caused.

[...] Forcing all consumers to live by rules that cater to the least responsible individuals imposes huge costs on everyone else and ultimately fails to protect even the willfully ignorant.

[Cross-posted at Shrubbloggers.]


Filed under: Corporatism, Drug Policy, Food Policy, Nanny State, Public Choice, Regulation
Comments: 1 Comment
 

Eric D. Dixon‘We Don’t Need a Special Master to Level the Playing Field’
Posted at 3:59 pm on October 26, 2011, by Eric D. Dixon

Cafe Hayek‘s Russ Roberts tells the House Oversight Committee that he wants his country back. Highlights of his testimony:

We are what we do — not what we wish to be, not what we say we are, but what we do. And what we do here in Washington is rescue large companies, large financial institutions, and rich people from the consequences of their mistakes. When mistakes don’t cost you anything, you do more of them. When your teenager drives drunk and wrecks the car, you keep giving him a do-over, repairing the car and handing him his keys, he’ll keep driving drunk. Washington keeps giving bad banks and Wall Street firms a do-over: ‘Here are the keys; keep driving!’ The story always ends with a crash.

And:

We need to stop trying to imagine we can design housing markets, mortgage markets, financial markets, and compensation.

Watch the whole thing:

[Cross-posted at Shrubbloggers.]


Filed under: Corporatism, Politics, Public Choice, Unintended Consequences
Comments: 1 Comment
 

Eric D. DixonGovernment Is a Broker in Pillage
Posted at 4:20 pm on March 5, 2011, by Eric D. Dixon

H.L. Mencken summed up public choice theory in 1936:

The state—or, to make the matter more concrete, the government—consists of a gang of men exactly like you and me. They have, taking one with another, no special talent for the business of government; they have only a talent for getting and holding office. Their principal device to that end is to search out groups who pant and pine for something they can’t get, and to promise to give it to them. Nine times out of ten that promise is worth nothing. The tenth time it is made good by looting A to satisfy B. In other words, government is a broker in pillage, and every election is a sort of advance auction sale of stolen goods.

[Cross-posted at Shrubbloggers.]


Filed under: Economic Theory, Politics, Public Choice
Comments: 1 Comment
 

John W. PayneAgainst Citizenship
Posted at 5:52 pm on September 26, 2010, by John W. Payne

Many conservatives have been kicking up a fuss over birthright citizenship, which automatically makes any child born on American soil an American citizen regardless of whether the child’s parents are American citizens. These conservatives complain that so-called “anchor babies” allow immigrants stay in the country illegally and take jobs from “real” Americans. I agree that these children did nothing to deserve American citizenship, but I find the conservatives’ selectivity repugnant. After all, the children of American citizens did nothing to deserve their citizenship either.

So here’s what I propose: no one should get American citizenship at birth. Everyone in America, citizen or not, should still have all the rights enumerated in the Bill of Rights, but if someone wants to vote or run for public office, it is completely reasonable to demand that they have a working knowledge of American government. When an immigrant seeks naturalized citizenship, he has to take a test that covers American history and civics–vital information for being an informed participant in the democratic process–and I fail to see, at least in principle, why we shouldn’t all potential voters to pass the same test.

Pundits constantly bemoan the fact that the electorate is uninformed or, even worse, misinformed. This would remedy that problem to some degree and could very well lead to better policy outcomes. In The Myth of the Rational Voter, which I discussed in my last post, Bryan Caplan shows that the informed public is far more likely to agree with economists on issues like free trade and immigration (i.e. more supportive of both) than the general public. I’m under no illusion that restricting the franchise to the informed would usher in my libertarian utopia, but it might lead to fewer obviously stupid policies like protective tariffs.

My one reservation about this plan is that there would be an incentive for a powerful interest group to game the test and systematically exclude certain sets of people, and I think that’s worrisome enough that I’m not adamantly in favor of implementing such a system. Nonetheless, in principle I think the idea is sound. Democracy should not be an end in itself. It is only good if it produces good policies, and there are numerous (and mostly obvious) reasons to think that an informed public would vote for better policies than the ones we currently live under. It would be nice if all Americans were well informed about our government and public policy, but that’s never going to happen–the incentives just aren’t there–so why not limit the electorate to those who actually care enough to know what they are doing when they vote?

Cross-posted at Rough Ol’ Boy.


Filed under: Public Choice
Comments: 5 Comments
 

John W. PayneAt the Risk of Being Unpopular, This Economist Places the Blame for All This Squarely on You, the Voter!
Posted at 5:50 pm on September 26, 2010, by John W. Payne

I’m currently reading The Myth of the Rational Voter by George Mason University economist Bryan Caplan, and his basic thesis is that democracies enact bad policies not because the democratic process is take over by self-interested elites but because the people are ignorant and biased and get precisely the bad policies they want. I’m certainly inclined to agree with this as I believe that, by and large, the people are stupid, vicious, and evil (not you, dear reader; you take the time to listen to what I have to say), but I think Caplan errs when he literally marginalizes the role of special interests:

Politicians’ wiggle room creates opportunities for special interest groups–private and public, lobbyists and bureaucrats–to get their way. On my account, though, interest groups are unlikely to to directly “subvert” the democratic process. Politicians rarely stick their necks out for unpopular policies because an interest group begs them–or pays them–to do so. Their careers are on the line; it is not worth the risk. Instead, interest groups push along the margins of public indifference. If the public has no strong feelings about how to reduce dependence on foreign old, ethanol producers might finagle a tax credit for themselves. No matter how hard they lobbied, though, they would fail to ban gasoline. (Emphasis in original.)

I think this explains much if not most of public policy, but there are some glaring exceptions where special interests have persuaded Congress, by comfortable majorities, to override public opinion. To take a recent example, solid majorities opposed bailing out GM and Chrysler, and the public followed the issue about as closely as any in the last two years, yet it still passed Congress with bipartisan support. Similarly, although the TARP was initially popular, by the time the second round of funding was set to be released, the public had turned overwhelmingly against it, but there was never a realistic possibility Congress would rescind the funding.

Now, I’m sure these votes will come back to hurt some Congressmen in November but not all that many, and I think this is where Caplan’s theory falters. Congressional districts are so heavily gerrymandered that most incumbents never face a serious challenge regardless of their voting record. Nancy Pelosi could kill and eat a hobo in the Haight-Ashbury, and the people of San Francisco would still return her to Congress. Members of Congress from safe districts, which is about 70-80 percent of the House, are essentially free to indulge whatever special interests they please, so when basically every lobbyist in Washington starts telling them that the sky will fall if they don’t start shoveling money into the yawning mouths of failing banks and auto companies, they willingly complied without regard to public opinion.

Although I’m only about forty pages into the book, Caplan’s theory of democratic failure seems relatively sound, but he should take into account how non-competitive most elections are.

Cross-posted at Rough Ol’ Boy.


Filed under: Public Choice
Comments: 2 Comments
 

Henry Hazlitt"[T]he whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups."
Henry Hazlitt, Economics in One Lesson
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