Refusing to rest on his laurels, recently crowned Ethics Alarms “Commenter of the Year” texagg04 delivers a helpful, clarifying, erudite examination of the balancing process brought into play with the regulation of businesses for health and safety reasons. Here is his Comment of the Day on the post “Someone Explain To Senator Tillis That It’s Unethical To Make People Sick On Principle”:
Let’s unpackage this.
Purchasing Products and Services
When we buy a product or service, we don’t just buy the end result. We buy a long string of tasks leading up to that final product and sometimes we buy even more things than just the final product*. In this instance, that doesn’t just mean the food on your plate, as tasks, upon deep consideration are actually HUMONGOUS things that are composed of the Time necessary to complete, Material either used up in preparation or as a component of the end item, Personnel Knowledge needed to perform, Equipment which facilitates, and Space needed to complete the task.. You don’t purchase just the food. You purchase the time and care EACH employee puts into the process. From Day 1, you purchase the time a procurer makes a deal with a vendor OR personally hand selects the ingredients of your meal. You purchase the time and quality of the food storage in the pantry/refrigerator. You purchase the chef’s level of knowledge. You purchase the time he devotes to ensuring the burners are a certain temperature. You purchase the manager’s level of knowledge in keeping things efficient and cost effective. You purchase EACH AND EVERY action the server takes that could affect the final, tangible product or service.
So when you order a Large French Fries, you are ordering an entire Litany of tasks – not just the 40 or so deliciously greasy vehicles for transporting salt to your taste buds.
*Sometimes you are buying an entrepreneur’s pet charity or pet political candidate, when they devote part of their profits to that particular cause.
The Market Works
It does. It just sometimes produces results you personally disagree with. However, for the market to work, ENTIRELY by itself, you must have a handful of components.
1) Full Disclosure of your Product – that means the entire 1000 item long list of everything that goes into making the end product AND all the side items your money is purchasing as well.
2) Consumers on the Market actually approving or disapproving of items on the “Disclosure List” and believing their analysis to be solid enough to make a purchasing decision
3) Your personal standards aligning with the Market average.
So, FULL DISCLOSURE, would allow a market to work.
But no consumer has the kind of time available to read every single line of what goes into a product. We’d never get any commerce OR community interaction done. So a balance must be struck. We accept that certain standards of quality are REASONABLY expected from a service provider and THEREFORE don’t need to be disclosed. I shouldn’t be told that my food is kept away from roaches and mice. I shouldn’t be told that my waiter has been trained not to swear at me every time I ask for his attention. I shouldn’t be told that the electrical outlet on the wall next to me isn’t going to arc onto me as I grab my condensation covered glass to dake a drink…
We used to teach “Reasonable Expectations” of conduct religiously. We called them manners. In this intance, the manner in question is “Cleanliness is Next to Godliness”. No, there SHOULDN’T be a law that says “Wash Your Hands after Defecating and Before Handling a Customer’s Food”.
The Market Balance – Free Market vs Government Imposition
So, because we CANNOT expect commerce or community to occur if we expect EVERY single practice to be listed on the door of an establishment or the in the list of products, we cull those lists of all the “Reasonably Expected” bits…such as “Washing Hands”, we can sell items without Full Disclosure. But what happens when enough of the supply side of the market stops engaging in Reasonably Expected conduct because the Buyer does not have the time to check on it themselves?
You see, the Government, as per long meditation on my part, exists in regards to Commerce, to protect the Market from Forces that occur faster than the Market can generate solutions for those Forces. This is why an Army is a “product” provided by the Government…because Foreign Invasion would destroy the Market before the Market could generate a solution. This is why Fire Departments & Police are provided by the Government… because the contingencies they deal with occur rarely enough to the individual consumer that the Free Market would never sustain such on its own and would never generate one in time to deal with the needs they solve.
What does that have to do with washing hands? Well, as I mentioned before, no consumer has the time to analyze EVERY single behind the scenes task that goes into the product he is purchasing. By no means would “dirty hands” destroy the market, BUT, when reduced to a simple mathematical ratio (the appearance of which I haven’t determined) that involves Time Available to a Consumer, Potential Harm to the Consumer, Cost to the Service Provider of Mitigating that Harm, then it makes perfect sense to require “Hand Washing”.
1) Time Available to Consumer – I’ve already beat this horse dead. The Consumer DOES NOT have the time to analyze EVERY single bit of the product he buys and still expect the Community & Commerce to occur.
2) Potential Harm to the Consumer – this may actually be relatively low in some instances, arguably for sure in the topic of the post. But in terms of Reasonable Expectations of service, it ranks much higher.
3) Cost to the Service Provider of Mitigating that Potential Harm – NEXT TO NOTHING. Another 2 ounces of water? A drop or two of soap? 10 more seconds of “Non-Productive” time of an employee? Sure it adds up, but as a percentage, this costs an employer NOTHING.
The ratio makes sense. Require the Employees to wash their hands. And it fits nicely into a Free Market.
Too Much Government
But yes, the government CAN go overboard and create so much of a burden on service providers that Commerce cannot happen either. To make a hyperbolic example of the current instance – the government could decide that all employees must completely decontaminate before leaving the rest rooms – taking up to an hour in chemical sprays and scrubbers to reduce those cleaning chemicals. Eventually more time and resource are spent following the regulation and the employer can’t sustain his service anymore.
An obvious hyperbole, but yes, balances must be struck. I don’t know how Tillis managed to mess up this balance.
I am a rabid fan of what I call “Full Disclosure Free Market”. I think consumers need to know far more about the behind the scenes aspects of the products they buy. It would only compel providers to increase quality where the consumers want it and it would convince alot of the government-drum-beating drones on the left that some regulations are just plain dumb and don’t rise to the level of importance they think it does.
Level of government matters considerably as well. On this topic, is this a State issue? or is it a municipality issue? Certainly not a national issue.
25 thoughts on “Comment of the Day: “Someone Explain To Senator Tillis That It’s Unethical To Make People Sick On Principle””
Did you see the report that most supplements don’t contain what they say they contain? I have run these test before. If you purchase a supplement and the ingredients are expensive an not clearly detectable (by taste, for instance) my cynical nature and the results I have seen suggest that ingredient is probably not in there or is present only in a fraction of the amount stated. I think they said that only 4% of the supplements at Wal-Mart had the listed ingredient (probably meaning in the amount listed).
Heard it on the radio just now, driving back from Richmond..wow.
I have had students test supplements before. The ones that could kill people are usually fine (iron), the cheap ones are usually fine (antacids), the expensive ones… It is amazing what you can find out with a UV-Vis, an HPLC, and an atomic absorption spectrometer.
Another essential component is that government must enforce regulations in an even-handed manner.
Haphazard, arbitrary enforcement of regulations is worse than no regulations at all.
And here is the thing. so many in government are “greedy …. inept”, and create “bureaucracies that serve themselves, not the public interest.” So what checks and balances do we need to ensure that laws and regulations are enforced in an even-handed manner?
A concientious and active populace that prefers most problems solved and enforced at the lowest and most accountable level.
Tex has described perfectly the ideal of a purely competitive market place. Most market force advocates forget that the construct is an ideal and hardly ever a realty. The fundamental basis for the competitive market rests entirely on complete information being available to both buyers and sellers.
The mere fact that asymmetric information exists in virtually every transaction – and usually in favor of the producer, it stands to reason that government must step in when issues of public health and safety are concerned.
The invisible hand of the market does rationalize productive efforts efficiently but the other element of the competitive ideal is rational self interest. Rational self interest does not rule out bad behavior when one party to a transaction believes he or she can get away with something when the benefits outweigh the costs. Good regulations merely attempt to level the playing field and not impose an undue burden on one side. Hand washing signs are one of the least intrusive regulations that business must bear.
As explained here and in my comment above, regulations do not good if enforced in an arbitrary, capricious manner.
” it stands to reason that government must step in when issues of public health and safety are concerned.”
But only insomuch as it’s ACTUAL benefits are worth the ACTUAL costs…
If market practice X results in 5 out of 1,000,000 getting sick with the cold, and the best solution the government comes up with reduces that number to 4 out of 1,000,000 but at the cost of several companies going out of business because operating expenses increase, privacy being eliminated, and taxation to fund the enforcement of the solution reduces aggregate quality of life, then the gov really shouldn’t step in…
See, for example, the actions of the Quincy, Illinois city council .
I am certainly no fan of Cartel-like industries with State backing driving out Free Market behavior…
But once we discuss Cartels with the State we aren’t discussing the Free Market anyway…
Where we run into problems are situations in which the government imputes an immeasurable cost based on emotional appeal. For example: “If this law/regulation saves but one child it is worth it.” However, say we enact a law to disarm all citizens – to save that one child’s life – making ownership of a firearm punishable by life imprisonment most gun owners would do one of two things: surrender their weapons or lead an insurrection. How they behave depends on how they value that right to own a firearm. Now, with all the guns removed from society, an invader, with weapons, enslaves the society that would have been prevented with an armed populace. Was that one child’s life worth the enslavement?
Another major issue is the definition of value. If I value a specific right that has no monetary definition then I can claim a cost of from the loss of that right as high or low as I want. We all claim to want free speech or privacy but what exactly are we willing to sacrifice to keep it when government decides it wants to restrict it? The NEA wants government to fully fund education but for some reason teachers taking a pay cut to make sure we have enough teachers to limit class sizes is off the table. Again, full funding is a moving target.
Ironically, the government has the power to and often does engage in the very monopolistic practices that it regulates in the private sector. It collectivizes the benefits that accrue but imposes minimal direct costs on any specific individual. That is how it gets away with pillaging the populace. It’s kind of like the movie where the guys uploaded a program to syphon off the last hundreds of a penny on every transaction. Get enough transactions and the money will grow. Collective costs resulting from the entire society being robbed of liberties are never calculated or considered during the decision making process – i.e. when voting.
For the very reasons you cited we rarely know the true actual costs and benefits. For those times that complete information is too costly to obtain we rely on Occams Razor to rationalize the decision. Sometimes we win and sometimes we lose. That is the price we pay for incomplete information.
Your post was quite complete. The freer the market the more efficient it will be and opportunity costs will fall. Your inclusion/explanation of pure public goods was an added bonus. There is a place for government and government should know its place.
It is nice to read something from tex that I basically agree with, considering how much we disagree on.
But isn’t it easy to agree in the abstract whereas application is a bit more touchy?
Take this typical everyday conversation-
Person A: I think the room temperature should be determined by a process that takes into consideration a comfortable balance of heating and cooling.
Person B: Hey that’s a completely reasonable process for determining room temperature. I completely agree that the temperature should be set at a comfortable level.
A: Great! Let me go set it.
B: Woah, you addelpated lunatic! 65°?! This isn’t a meat locker!
I imagine what you consider fair and beneficial imposition on the marketplace, I would consider a gross and destructive overreach in which the actual costs far outweigh the actual benefits.
Well sure, in reality there is a large range of possible regulation levels that we could all put our opinions on and if it were a 2 dimensional range where people would be located on that graph would be all over the place depending on how much regulation they supported.
There are people who think smoking should be banned in bars. I disagree with them and feel that market forces should determine that.
On the other side of the coin, there are people who believe the oil industry should be allowed to drill sans regulation and that government should just “get out of the way”. I disagree with such folks and not only believe that the oil industry contains various dangers that should inherently require regulation but that there are areas where the oil industry has proven itself untrustworthy and requiring of regulation.
But on this particular area of regulation, where it is unreasonable to expect that a consumer has the time to obtain all the possible information as possible, there is solid justification to have some sort of regulatory oversight and in that we agree.
But of course, even when I point out agreement between us you insist on finding the area of disagreement. I am not surprised in the least bit.
That wasn’t the intent.
It’s because I was criticizing a Republican moron rather than a lesbian Democratic extortionist…
There are plenty of Democratic morons. In fact I am no longer a registered Democrat in the State of Louisiana because back in March when unrepentant felon Edwin Edwards decided to run as a Democrat for Congress I said that if the state party endorsed him that I would immediately leave the party. Well, they endorsed him and I immediately left the party and registered as “No Party”.
I do not support the Alabama rep because of her party affiliation. I just disagree with your assessment of the matter.
Do something good as a Republican and I will praise you regardless of affiliation. Do something stupid as a Democrat and I will mock you regardless of your affiliation.
I’m beginning to think you’re a shill for the the Whigs as you haven’t criticized a single candidate of theirs yet.
I would think my photo proves my disdain for whigs…
The hapless pitcher did his best; but all he managed was a slow high angling lob. It clumsied off his fingers and hovered there suspensefully.
The batter swung! Crack! And out of the ball park!
And to think I actually spent considerable time looking through the list of minor parties…
And meh, pretty much pro-choice libertarians. 🙂
I have only one disagreement with Tex’s comment. A market does not require absolute perfect information to function well enough, although a perfect market might. Consider the existence of Consumer Reports as an example of the market providing sufficient information to make a decision without the customer evaluating it himself. I think competing certifying agencies would be a better solution than a government mandated monopoly as we sometimes get with current licensing regimes, although I’m open to evidence to the contrary.
I think outright fraud DOES require government intervention, and that some issues are so much more efficiently handled with the law that even if it could theoretically be done without direct regulation it probably shouldn’t. Environmental law hits this point for me, even though the process is abused and manipulated by various groups. Regulatory capture is a big reason I hesitate to endorse a strong regulations in practically anything, but our court system could not realistically handle the lawsuits necessary to deal with pollution on a pure property rights basis.