Government regulation is one of my biggest frustrations. Here are just three examples that hit our family, all in August.
1. A couple of weeks ago, I developed the worst toothache I’ve ever experienced. At times the pain was so severe I couldn’t concentrate enough to even read a book. The dentist I called wasn’t in his office (it was Sunday morning.) He recommended taking some Tylenol and/or Advil, which didn’t help much at all.
Back in 1900, I could have just walked to a nearby druggist and bought an adequate painkiller. In many respects our medical system has regressed since 1900, due to government regulation.
2. My daughter tried to buy some disposable contact lens online. At first things went fine. The seller contacted her eye doctor and confirmed the prescription was valid. But the next time she ordered contacts a problem developed; the eye doctor decided to be a jerk and insist on a new eye exam, even though she had recently had one. It seems that she’d switched from monthly wear to daily wear, of the exact same prescription. Of course this was merely a case of the eye doctor trying to earn extra money.
Back in 1900, these contact lens didn’t exist. But if they had, she would have been free to buy them without anyone’s permission.
3. My wife was trying to buy insurance for our house. Due to a California regulation, we were forced to insure the house at “replacement value”, which in our case is roughly the price we paid for it. Unfortunately, this “replacement value” is about 75% above the actual value of the house itself. This is because much of the value is in the land, which would not get destroyed in even the worst sort of fire.
And here’s what’s especially weird. We are under no obligation to buy any insurance at all. (We don’t have a mortgage.) California says it’s perfectly legal for us to not have any home insurance, but illegal to buy $800,000 of insurance on our home. Back in 1980, I could have legally bought the cheaper policy.
In addition, my wife must frequently deal with all sorts of hassles relating to private health insurance, which are ultimately caused by foolish government regulations.
It’s often claimed that conservatives are liberals who have been mugged, and liberals are conservatives who have been indicted. (BTW, President Trump’s remarks about his indicted friends often resemble the comments of far left extremists—i.e. suggestions that there is a deep state at the Justice Department, out to get people with heterodox political views.)
So why aren’t there more libertarians? My theory is that some types of evil are easy to see. If we’ve been mugged by a robber then we know who the villain is. But the cases above are more complex. Average people might not know their toothache is caused by government regulation; they might grumble that their dentist is not open on Sundays. They might complain that their eye doctor is being a jerk. Most people wouldn’t even know about the California insurance regulations, and just assume it’s an insurance company policy. Or they might forget that there is no need to insure land. People frustrated with private health insurance companies might wrongly blame capitalism, and even become more favorable to socialized medicine.
The best way to create lots of libertarians is not to explain to people that freedom is a “natural right”, it’s to show people how government regulation is constantly making their lives more miserable.
PS. The American Dental Association says an ADA dentist is always nearby. But what if you don’t live near Trafalgar Square?
READER COMMENTS
Robert EV
Sep 3 2018 at 7:23pm
Her eye doctor is being a jerk.
Electronic Code of Federal Regulations
Title 16 → Chapter I → Subchapter C → Part 315 → §315.5 Prescriber verification.
§315.6 Expiration of contact lens prescriptions.
Mark
Sep 3 2018 at 8:11pm
Each of these regulations also benefits some class of people enormously: doctors (who through the AMA lobby for many harmful regulations; I don’t doubt dentists have a similar organization); hospitals, insurance companies, real estate agents their associations, law enforcement officers, all benefit immensely from many of the harmful regulations they lobby for. So the concentrated benefits and diffuse costs of such regulations is probably a factor.
Mark Brady
Sep 3 2018 at 8:45pm
I don’t understand your third example.
ww.insurance.ca.gov/01-consumers/105-type/95-guides/03-res/res-ins-guide.cfm#willmypolicy
Eric Rall
Sep 7 2018 at 3:00pm
I suspect Dr. Sumner’s insurance company is misapplying this regulation, which dictates how insurance companies are supposed to generate replacement-value estimates. The regulation specifically excludes the value of the land from the replacement-value estimate:
B Cole
Sep 3 2018 at 9:39pm
I had excruciating incapacitating tooth pain. I later read on the Internet that excruciating tooth pain is ranked very very highly on pain-o-meters. I spent a sleepless night with an ice cubes in my mouth to endure the pain.
I would say there are two or three times in my life I wanted morphine, this was one.
On the other hand, the mere semi-legalization of opioids seems to have created an entire class of dependent people and 42,000 overdose deaths in the US in 2016.
Scott Sumner
Sep 3 2018 at 10:59pm
Ben, I don’t see any evidence that legalization caused all of those deaths. Most of the deaths involved taking illegal drugs, where getting the proper dosage is much harder precisely because they are illegal. That’s not to say there isn’t a serious addiction problem with various legal drugs (including Oxycontin and alcohol), just that you can’t attribute the entire problem to legalization.
ChrisA
Sep 6 2018 at 8:41am
I suggest that next time you are in China or a similar less regulated country than the US, you buy some stronger medicines over the counter as preparation for these events. As long as they are in their proprietary packaging the legal risk is very low. I had toothache one new year while I was in Thailand and the local pharmacy were very willing to sell me almost anything I wanted. I tried the antibiotic they suggest which significantly alleviated the pain enough to get through the holiday and go to my dentist at home.
Matthias Goergens
Sep 3 2018 at 9:56pm
B Cole, I’ve read some good things about Cannabis (of all things) to help with opioid addiction. Google has a few examples.
Scott Sumner
Sep 3 2018 at 10:54pm
Robert, I assume the doctor claimed that going from monthly to daily wear required a different prescription.
Mark Brady, I’m not sure I understand either, so I may be wrong. The insurance companies we contacted refused to insure the house for less that their estimate of replacement value, and cited this recent law:
http://propertyinsurancelawobserver.com/2017/01/27/california-supreme-court-upholds-replacement-cost-estimate-regulation-for-now/
They said that prior to this law’s enactment, they would have been willing to insure it for a lower amount. That’s all I know. If I’m wrong, let me know and I’ll try again.
BTW, it’s possible that it’s partly a “fear of lawsuit” issue, which often interacts with regulation.
Robert EV
Sep 5 2018 at 11:03am
The doctor claiming whatever doesn’t change the law.
Scott Sumner
Sep 7 2018 at 12:23am
Robert, I never said he changed the law.
Robert EV
Sep 7 2018 at 10:42am
So doesn’t his prior prescription automatically become valid for dispensing under 315.5 c and 315.6 b 2? Or is it over 1 year old?
Scott Sumner
Sep 7 2018 at 4:34pm
I don’t know if the prescription applies to only monthly wear, or also daily wear. You might be right, I simply don’t know.
Michael Sandifer
Sep 4 2018 at 12:52am
And at least part of the reason you can’t find a dentist on Sundays is that, in part through the cartel known as the ADA, the supply of dental services is artificially restricted.
taxedserf
Sep 4 2018 at 9:24am
This article is a great demonstration of the English-speaking view of regulation as a means to limit freedom. The Anglo-Saxon “negative” freedom is “everything is permitted unless it is expressly prohibited.”
By contrast, in the non-English-speaking world, regulation is the primary legal form of permission. It is particularly prevalent in civil code legal systems, especially those based on the Napoleonic code (“Everything is forbidden, unless expressly permitted”), and especially on the “Teutonic” variants (“Everything is really absolutely forbidden, don’t even think of trying to be clever, and get at least four forms of state approval before considering it permitted”).
The protectionism of European Economic Area is thus achieved by means of permissive regulation. The main process by which permissive regulation works is “conformity assessment”. Within that process are product standards, manufacturing standards, selling standards, distribution standards, indemnity standards, traceability standards, insurability standards, ecological standards, consumer standards, etc…. the whole lot.
This is the only way that the Europeans were able to create a single, internal market in many goods (and some services).
The protectionism is arguably more a benefit to producers than consumers. Barriers to entry exist where entrants cannot prove conformity assessment. The barriers are as much to protect European “national champions” from home-grown disruptive European upstarts as from foreign competition. In addition, because the standards are equal throughout the EEA, insurance policies are much easier to write. The main benefit to consumers is traceability: the trade-off made on the consumer’s behalf (without their express consent) is an opportunity cost of buying non-conformant stuff, i.e. “safety” v “choice” (yes, that is a bit a spin, so be it!).
As a consequence, the Canadian free-trade deal with the European Union does not waive away the requirements of conformity assessment that apply to livestock and meat products. The Canadians would need to implement loads of rules; it seems that Canada has concluded that it would be expensive – insufficiently profitable – to seek compliance with the EEA. Which, of course, is precisely what the Europeans want the Canadians to conclude! The British, who should know better, look set to re-learn the Canadian lesson the hard way as a consequence of their incompetently mis-managed Brexit.
Food safety is thus more reliable in the EEA than outside of it precisely because of regulation. It is difficult to imagine, short of state-sponsored corruption, how melamine could contaminate baby milk power in the EEA (as it once did in China). It would be detected. Similarly for the generally low levels of food safety expected of India, e.g. https://medium.com/@nishaparmar/nformation-about-food-safety-whats-safe-what-s-not-in-india-3b9903e6bb7d .
The system isn’t perfect. The meat industry of EU member nation Ireland successfully smuggled horse meat into the EEA food chain, wrongly labelled as beef meat. The regulators can be corrupted after all. The largest group of affected consumers were British, who didn’t notice until the news broke; there was anger, of course, including anger from those who rather liked the idea of tasting horsemeat and wished they had the chance to do so consciously.
But to have the regulation – no matter how irksome and at such an economic opportunity cost – is probably better for the consumer than to not have it.
Alan Goldhammer
Sep 4 2018 at 10:49am
#3 is curious. Our property tax statements in Maryland are divided in two parts, one for the dwelling and the other for the value of the land. Because we are inside the Beltway living in a desirable area the land assessment is just over twice the value of the dwelling (a modest 1955 split level home). The house has been paid off for some years now so I cannot say what the issue might have been when we still had a mortgage but our purchase price was much lower (bought the home in 1985). Our home owner’s insurance only covers the cost of replacement of the dwelling and we can decide what that might be (though Travelers always wants to inflate things so you have a higher premium payment).
Thaomas
Sep 4 2018 at 11:14am
“The best way to create lots of libertarians is not to explain to people that freedom is a “natural right”, it’s to show people how government regulation is constantly making their lives more miserable.”
I’d amend that to “The best way to create lots of neo-Liberals is not to explain to people that taking input from producers is bad, it’s to show people how government regulation needs to weigh both costs and benefits.” And that has to be done so one by one. It is of course possible that the rule on requiring the excess insurance was a pure power play by the insurance industry to increase their profits made possible by corrupt legislators doing a favor for their donors (like the recent “Tax Cuts for the Rich and Deficits Act of 2017”), but I’d guess that at least some legislators were persuaded by some bad argument about how consumers would benefit more from the regulation than it would cost them.
Scott Sumner
Sep 4 2018 at 3:45pm
taxedserf, Not sure how your comment relates to this post. In any case, wasn’t Mad Cow disease primarily a EU problem, not a US or Canadian problem?
Alan, You said:
“we can decide what that might be”
I don’t believe we have that right in California, since 2011.
Merrill M Hess
Sep 4 2018 at 7:43pm
If you want to know the extent of federal government regulations subscribe to the daily Federal Register Table of Contents publication. No cost. You have already paid for it with your taxes. The Federal Register is where new regulations, updates, changes, and requests for comment are published. Each day a average of 100 new regulatory entries are made. Mind you, this is only the federal government and does not include state or local regulations. I hear people complain about the “deep state” but the bureaucratic state is prevalent in ways people do not realize. Many bureaus have great autonomy in writing regulations which have the effect of law.
https://public.govdelivery.com/accounts/USGPOOFR/subscriber/new?preferences=true#tab1
andy
Sep 6 2018 at 2:03am
Why aren’t there more libertarians? My theory is that it is because people think earth is flat…err… don’t understand even the total basics of economics. I recently had discussion with some friends about ban on smoking in restaurants. In all cases the people completely ignored that this harms smokers. Even when I pointed out ‘they could have gone to smoke in the restaurant, now they cannot – they are worse off’, it didn’t sink in.
I pointed out that in the discussion we should consider benefits and costs to all parties. Yet, people refused to consider costs to people wanting things that were contrary to their own preferences. Forbidding people who prefer to use a car instead of public transport to use the car is not a cost (with regard to cost-benefit analysis) because I don’t apporove using a car to move around the city.
When I was reading some older libertarian books, I always wondered why do they stress the ‘wert-frei’ part of the arguments. I’m starting to understand this…
Robert EV
Sep 6 2018 at 10:33am
There is no cost to a smoker of banning smoking anywhere, because the smoker can get nicotine through many alternative means (chew, gum, snus, patch; theoretically snorting, injection, food additive, drink), and can suck on a stick.
Before I even consider the possibility that smoking shouldn’t be outright banned (tobacco and marijuana), I’d like to see smokers actually obey the laws. It’s hard enough avoiding second-hand smoke as is. (A year ago I finally acted fast enough to find the smoker whose smoke was blowing into our unit when my wife opened the window in the morning to air it out, and ask them to move further away [they already thought they were far enough away, but the structural aerodynamics channeled the smoke down the corridor]. But this was only after another secretive smoker had moved. And FYI, cigarette smoke isn’t only just an annoyance, it is an actual medical issue for our household [migraine trigger].)
TL;DR: Externalities isn’t a concept just for theoretical economists, it’s for libertarians too.
andy
Sep 6 2018 at 6:10pm
As I have written: Forbidding people who prefer to use a car instead of public transport to use the car is not a cost (with regard to cost-benefit analysis) because I don’t apporove using a car to move around the city.
You don’t want to count banning smoking as a cost to smokers because you don’t approve smoking. That’s bad economics. You have to consider costs and benefits from the point of view of the people who are affected; not from your point of view. It seems to me that you have actually proven my point.
Robert EV
Sep 7 2018 at 10:50am
For some reason I can’t post my prior response to you. Perhaps the spam filter is catching it?
Synopsizing: There are many things which are banned in public (or when publicly ‘viewable’), would you say that all of them shouldn’t be banned and the onus on the rest of us to navigate around them?
Smokers had an obligation to avoid subjecting others (including family members bound to them by law) to second hand smoke. They failed in this obligation (as a group, I’m sure there are polite exceptions), and now the obligation is coded into law, as it should be.
Libertarianism implies personal responsibility for the externalities of one’s actions.
andy
Sep 7 2018 at 5:35pm
Robert, the problem is that I haven’t even touched the issue if banning smoking in private restaurants is justified or not.
What I have said is that people many people when arguing for banning by stating costs and benefits conveniently “forget” to mention that the fact that the resulting absence of smoking pubs is a harm to quite many people who would have preferred to use such service.
I’d say that such omission disqualifies the person from the discussion. Because such person is either intentionally ignoring harm that such decision would have for quite a big part for the population, or is ignorant of basic economics (basically, that value is subjective).
When doing cost-benefit analysis you are supposed to count all costs and benefits. Not only costs and benefits that you find ‘good’, but all costs. Not doing that intentionally is tantamount to lying.
Joe Munson
Sep 6 2018 at 3:35am
I can relate to this.
I’m still very angry that I can’t sell my kidney. It’s become a running joke among my friends because I harp on it so much, and I play it off as a joke but man, I strongly suspect the proceeds from such a transaction would improve my life by quite a bit, AND I would be saving a life.
Tom DeMeo
Sep 7 2018 at 10:07am
In a world free of regulation, I assume you wouldn’t grant some form of legal protection granted to drug manufacturers of pain killers. Under such circumstances, I would expect that opioids would be sued out of existence by now, and you wouldn’t have access to them at all.
This is the part of the regulation argument that gets lost. The truth is that often, regulations create a legally viable framework for an economic activity that could otherwise never break free of its problematic liabilities. We decide that society needs something, dirty as it is, and we allow it. It is protected from certain liabilities in exchange for certain controls.
Tom DeMeo
Sep 7 2018 at 10:13am
I would just add that it is often true that the implementation of the controls is often indefensible. We can do far better, and it is a weakness of our system that we rarely work to improve these mechanisms.
Phil H
Sep 9 2018 at 5:51am
“So why aren’t there more libertarians?”
Because these arguments are dependent on highly contentious counterfactuals. “…our health system has regressed since 1900” – I honestly think this is a silly claim. First there’s just the blunt riposte – would you rather have health issues now or in 1900? To which I think the answer is obviously ‘now’. Second, there’s a confusion in your story between the individual level and the system level. The quality of a system is measured by how well it serves the maximum number of people; it is entirely possible for a good system to inconvenience some people some of the time.
More generally, the reason there aren’t more libertarians is because libertarians don’t take seriously enough their obligation to answer the question: If all this government is so bad, why is life now so much better than back when there weren’t very many laws at all?
There are answers to this question. They need to be made very forcefully. Wishful demands for unrestricted access to opioids does not constitute an effective answer.
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