regulation — VOICES for REASON

New York Mayor Michael Bloomberg doesn’t like the amount of salt that Americans consume—and therefore he wants to force us to consume less. The newly launched National Salt Reduction Initiative seeks to reduce Americans’ consumption of salt by 20 percent over the next five years. The program is described as “a coalition of cities, states and health organizations working to help food manufacturers and restaurants voluntarily reduce the amount of salt in their products.” This coalition will set reduced sodium targets in a broad array of foods, and businesses who sign on will pledge to meet those goals.

Seems harmless, right? After all, too much salt is supposedly unhealthy and, if you disagree with the goals of the program, well, it’s voluntary. Except that “voluntary” government programs are anything but. Just as the trans fat ban Mayor Bloomberg instituted in 2008 was preceded by a call for restaurants to “voluntarily” eliminate the lipid from their kitchens, so the National Salt Reduction Initiative is a warning shot for food producers and restaurant owners to reduce salt levels . . . or else.

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In a recent series of posts I discussed how increased government control over health care in America would devastate the medical technology industry and stifle innovation. But the negative effect that government interference has on innovation is true for any industry. From cookware to computers, men will only invest time, money and thought on developing new products if they project the payoff to be worth it. The more the success of a potential product is subject to the dictates of Washington bureaucrats, the less likely that potentiality will be made real. The more regulatory hurdles one has to overcome to achieve a dream, the less likely one will make the effort to overcome them.

This past Monday bore witness to the achievements possible to man when he is left free. In a hangar in the Mojave desert, Sir Richard Branson and his team at Virgin Galactic lifted the veil off Space Ship Two, the world’s first commercial spacecraft. Space Ship Two will take passengers to a height of 68 miles above Earth, well beyond the recognized border of space. It is one of a number of private spacecraft being developed in the nascent space tourism industry, which will make it possible for private citizens to experience wonders previously reserved for government astronauts.

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It’s vital to see how the “bundle of rights” approach obliterates property rights as a moral principle. In truth, property rights are inviolable moral principles, protecting each individual’s sovereign right to keep the material values he earns and use them to support his life. This principle is violated when the very first “stick” is removed—that is, when property rights are infringed for the very first time. The crucial benefit of principles is that they serve as early warning systems, like the nerve endings in your skin, alerting you to any damage, no matter how slight, so that you can quickly identify the source of the pain and fight it. The “bundle of rights” approach is specifically designed to anesthetize you against awareness that your rights are being violated. That way, a thousand cuts can be inflicted—a thousand regulations can be imposed—and you won’t know what’s happening to you. Here’s how the authors sum it up: “[F]raming property as bundles of rights and forewarning of limitations weakens perceptions of ownership and decreases resistance to subsequent restrictions.” (Italics added). Here’s my translation: If legal professionals systematically avoid telling people they have a moral right to their property, there will be less messy resistance when those rights are taken away by government fiat. Under this concept, property rights can be selectively violated (or eradicated) by majority vote—rendering them in fact (but not in name) “bundles of permissions.” Read the rest of this entry »

Do you remember the moment when you turned the key in the lock of your first automobile, or your first house? Can you recall the sense of exhilaration you felt? “This is mine, all mine, and nobody can tell me what to do with it,” you may have thought. Part of what you were experiencing was the pleasure of ownership—exclusive personal dominion over an important material value.

If you’ve ever felt such owner’s pride, then you should be aware that according to theories long dominant in law schools, you don’t really own a car or a house—you only have a “bundle of rights” pertaining to its use. For example, if you have land, your “bundle” might allow building on it, walking on it, cutting down trees on it, digging in it, growing plants on it, fencing it off, and so forth.

This way of looking at property might strike you as idle academic chat. But it has serious real-world implications for anyone who values their property rights. Consider a recent scholarly article called “Property Frames” by two law professors (Jonathan Remy Nash, of Emory University School of Law in Atlanta, and Stephanie Stern, of Chicago-Kent College of Law) who use the bundle theory to answer the startling question with which they begin their paper: “How can we most effectively weaken property rights?”

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Want a sample of the burdens that employers must endure in resisting suits under the various “civil rights” laws that bar discrimination on the basis of race, sex, age, disability, etc.?

A postal worker sued his employer, alleging age discrimination. To mount a successful suit, a plaintiff must prove he suffered tangible harm from an “adverse employment action.” Normally, that’s a discharge, demotion, pay cut, or other obvious detrimental event.

This particular plaintiff, however, claimed in effect that the adverse action was making him do some work. That is, he was transferred from a job with no duties to a job with some duties. Don’t believe me? Here’s his testimony, describing his job before the transfer:

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Here’s U.S. Treasury Secretary, Timothy Geithner, on March 26th, 2009 before the House Financial Services Committee on “regulating risk”, when he outlined his plan for a “comprehensive framework for regulatory reform”:

Supervision and regulation failed to prevent these problems…U.S. law left regulators without good options for managing failures of systematically important non-bank financial institutions…We must end the practice of allowing banks and other financial companies to choose their regulator simply by changing their charters; regulators must choose who to regulate. Moreover, our regulatory system must be comprehensive and eliminate gaps in coverage. Our regulatory structure must assign clear regulatory authority, resources, and accountability for each of the key regulatory functions….

What’s Geithner really saying here? Consider the following as a translation: Read the rest of this entry »

First there was the drug czar, then the energy czar, and (possibly) a car czar. Now we can add to the list: Cass Sunstein, Obama’s new “federal regulatory czar.”

Sunstein is a well-known law professor and author of numerous books, including his recent work Nudge: Improving Decisions About Health, Wealth, and Happiness, co-authored with Richard Thaler. (Eric Daniels has a devastating review of the book in the Fall 2008 issue of The Objective Standard.)

If you want a hint of what Sunstein brings to the table, consider his proposal for what he called “fairness-doctrine-type mandates on Web sites.”

[The Internet Fairness Doctrine proposal] suggested that it’s reasonable for government to think about creating the equivalent of linking obligations and pop-ups, so that you’d be on one site–say, a conservative site–and there’d be a pop-up from a liberal site.

Not to worry, though. It turns out that Sunstein eventually saw the light and decided his proposal was–his word–”stupid.”

Was it because he came to see that the government shouldn’t be forcing Americans to promote ideas they disagree with? Not at all. Rather, he backtracked, saying “the Internet is too difficult to regulate.”

Welcome to the mind of a regulator: I will decide what’s best for individuals. If I think conservatives don’t read enough liberal articles, I’ll devise some clever way to make them. Sure, sometimes I’ll come up with “stupid” ideas, but that’s okay. I’ll just wave my regulatory wand the next day and try something else.