The Jungle, Regulatory Capture, and Self-Interest

[aociswundumho]

Probably the best argument against government regulation is the fact that the incentives facing individual government regulators are all backwards.

Consider two different government regulators who oversee large corporations. We'll call them Joe and Bob.

Joe doesn't make life easy for the corporations. He makes decisions based on what's best for society. He will receive zero recognition for this, and when he retires, he will have his government pension.

Bob does his job much differently. He chooses to "play ball" with the executives of the corporations he regulates, and in return, the big corporations provide cushy jobs for Bob's friends and family members. When Bob retires from "public service", he is given a lucrative consulting gig for one of the corporations he used to regulate. That's on top of his government pension.

In the real world, the Bobs outnumber the Joes 100 to 1.

With that in mind, let's go back over a hundred years.

For those of you who don't know, The Jungle was a muckraking novel written by a socialist named Upton Sinclair in 1906. His purpose was to expose the "exploitation" of workers in the meat packing industry, but his graphic description of the unsanitary conditions in the factories is what everyone who read the book focused on. As Sinclair himself put it: "I aimed at the public's heart, and by accident I hit it in the stomach."

Progressive Teddy Roosevelt was president at the time, and letters were pouring in to him to "do something" about the meat packing industry.

From Sinclairs autobiography:

(Roosevelt’s secretary later told me that he had been getting a hundred letters a day about The Jungle.) The President wrote to me that he was having the Department of Agriculture investigate the matter, and I replied that that was like asking a burglar to determine his own guilt. If Roosevelt really wanted to know anything about conditions in the yards, he would have to make a secret and confidential investigation.

In other words, the USDA was totally corrupt over a hundred years ago, and government agencies get worse over time, not better.

As a result of The Jungle, the government passed the Federal Meat Inspection Act.

This was Sinclair's reaction to the law:

Sinclair rejected the legislation, which he considered an unjustified boon to large meatpackers.

Of course, he was correct. Political regulation is a burden which is much, much easier for big corporations to comply with than for smaller firms, and big corporations can afford to lobby for the right kind of regulations while at the same time controlling the regulators who enforce them.

The progressive regulatory state really is the best friend a big corporation ever had.

 

[Peter]

Do you think the car industry would have spent so much money on safety and fuel efficiency as they have been forced to by government mandates from all over the world?

 

[Phys251]

Probably the best argument against government regulation is the fact that the incentives facing individual government regulators are all backwards.

Consider two different government regulators who oversee large corporations. We'll call them Joe and Bob.

Joe doesn't make life easy for the corporations. He makes decisions based on what's best for society. He will receive zero recognition for this, and when he retires, he will have his government pension.

Bob does his job much differently. He chooses to "play ball" with the executives of the corporations he regulates, and in return, the big corporations provide cushy jobs for Bob's friends and family members. When Bob retires from "public service", he is given a lucrative consulting gig for one of the corporations he used to regulate. That's on top of his government pension.

In the real world, the Bobs outnumber the Joes 100 to 1.

With that in mind, let's go back over a hundred years.

For those of you who don't know, The Jungle was a muckraking novel written by a socialist named Upton Sinclair in 1906. His purpose was to expose the "exploitation" of workers in the meat packing industry, but his graphic description of the unsanitary conditions in the factories is what everyone who read the book focused on. As Sinclair himself put it: "I aimed at the public's heart, and by accident I hit it in the stomach."

Progressive Teddy Roosevelt was president at the time, and letters were pouring in to him to "do something" about the meat packing industry.

From Sinclairs autobiography:



In other words, the USDA was totally corrupt over a hundred years ago, and government agencies get worse over time, not better.

As a result of The Jungle, the government passed the Federal Meat Inspection Act.

This was Sinclair's reaction to the law:



Of course, he was correct. Political regulation is a burden which is much, much easier for big corporations to comply with than for smaller firms, and big corporations can afford to lobby for the right kind of regulations while at the same time controlling the regulators who enforce them.

The progressive regulatory state really is the best friend a big corporation ever had.

No guv'mint regulation! Let the "free market" decide! Repeal the Federal Meat Inspection Act! Hands in meat, now!

...

Christ, do you ever realize how dumb your libertarian propaganda sounds?

 

[Peter]

No guv'mint regulation! Let the "free market" decide! Repeal the Federal Meat Inspection Act! Hands in meat, now!

...

Christ, do you ever realize how dumb your libertarian propaganda sounds?

There's a reason many US food products are banned in Europe.

 

[Peter]

I don't know why I can't post a link but if you put Krispy Kreme UK V US into google it's the second video where it shows all the differences.

Considering it's just a doughnut it's bloody astounding how many ingredients are banned in the EU.
Also as a side note a UK large coke at McDonalds is only slightly larger than a US small and the US large is twice our size.

I wouldn't have expected a company with outlets all over the world to have such variances.

 

[aociswundumho]

Let's consider a completely different regulatory body, the FCC.

It is totally corrupt:

The FCC has been criticized for ignoring international open standards, and instead choosing proprietary closed standards, or allowing communications companies to do so and implement the anticompetitive practice of vendor lock-in, thereby preventing a free market.

In the case of digital TV, it chose the ATSC standard, even though DVB was already in use around the world, including DVB-S satellite TV in the U.S. Unlike competing standards, the ATSC system is encumbered by numerous patents, and therefore royalties that make TV sets and DTV converters much more expensive than in the rest of the world. Additionally, the claimed benefit of better reception in rural areas is more than negated in urban areas by multipath interference, which other systems are nearly immune to. It also cannot be received while in motion for this reason, while all other systems can, even without dedicated mobile TV signals or receivers.

For digital radio, the FCC chose proprietary HD Radio, which crowds the existing FM broadcast band and even AM broadcast band with in-band adjacent-channel sidebands, which create noise in other stations. This is in contrast to worldwide DAB, which uses unused TV channels in the VHF band III range. This too has patent fees, while DAB does not. While there has been some effort by iBiquity to lower them,[88] the fees for HD Radio are still an enormous expense when converting each station, and this fee structure presents a potentially high cost barrier to entry for community radio and other non-commercial educational stations when entering the HD Radio market.[89] (Under the subsidiary communications authority principle, FM stations could in theory use any in-band on-channel digital system of their choosing; a competing service, FMeXtra, briefly gained some traction in the early 21st century but has since been discontinued.)

Satellite radio (also called SDARS by the FCC) uses two proprietary standards instead of DAB-S, which requires users to change equipment when switching from one provider to the other, and prevents other competitors from offering new choices as stations can do on terrestrial radio. Had the FCC picked DAB-T for terrestrial radio, no separate satellite receiver would have been needed at all, and the only difference from DAB receivers in the rest of the world would be the need to tune S band instead of L band.

The regulators at the FCC do what's best for themselves, as one would expect.

 

[aociswundumho]

Do you think the car industry would have spent so much money on safety

Seat belts were invented by the market, not the government. If people want safety, then it will be profitable to give it to them.

and fuel efficiency as they have been forced to by government mandates from all over the world?

Mandating fuel efficiency is downright stupid due to the law of demand. If cars get better mileage, then people just drive more. Furthermore the complexity needed to meet these idiotic mandates have an enormous cost, which people like you ignore.

 

[Peter]

Seat belts were invented by the market, not the government. If people want safety, then it will be profitable to give it to them.



Mandating fuel efficiency is downright stupid due to the law of demand. If cars get better mileage, then people just drive more. Furthermore the complexity needed to meet these idiotic mandates have an enormous cost, which people like you ignore.

The car companies did all they could to avoid having to fit almost all safety systems and were eventually forced to act.
This is a well known fact.

https://en.m.wikipedia.org/wiki/Unsafe_at_Any_

Speed

 

[aociswundumho]

The car companies did all they could to avoid having to fit almost all safety systems and were eventually forced to act.
This is a well known fact.

https://en.m.wikipedia.org/wiki/Unsafe_at_Any_

Speed

A 1972 safety commission report conducted by Texas A&M University concluded that the 1960–1963 Corvair possessed no greater potential for loss of control than its contemporary competitors in extreme situations.[31] The U.S. Department of Transportation (DOT) issued a press release in 1972 describing the findings of NHTSA testing from the previous year. NHTSA had conducted a series of comparative tests in 1971 studying the handling of the 1963 Corvair and four contemporary cars – a Ford Falcon, Plymouth Valiant, Volkswagen Beetle, and Renault Dauphine – along with a second-generation Corvair (with its completely redesigned, independent rear suspension). The 143-page report reviewed NHTSA's extreme-condition handling tests, national crash-involvement data for the cars in the test as well as General Motors' internal documentation regarding the Corvair's handling.[36] NHTSA went on to contract an independent advisory panel of engineers to review the tests. This review panel concluded that "the 1960–63 Corvair compares favorably with contemporary vehicles used in the tests

Chevrolet Corvair - Wikipedia

en.wikipedia.org

 

[Peter]

Chevrolet Corvair - Wikipedia

en.wikipedia.org

Do you deny that car companies failed to add safety features until they were forced to by regulation?
They fought against anything that added costs.

 

[Jason Warfield]

Probably the best argument against government regulation is the fact that the incentives facing individual government regulators are all backwards.

Consider two different government regulators who oversee large corporations. We'll call them Joe and Bob.

Joe doesn't make life easy for the corporations. He makes decisions based on what's best for society. He will receive zero recognition for this, and when he retires, he will have his government pension.

Bob does his job much differently. He chooses to "play ball" with the executives of the corporations he regulates, and in return, the big corporations provide cushy jobs for Bob's friends and family members. When Bob retires from "public service", he is given a lucrative consulting gig for one of the corporations he used to regulate. That's on top of his government pension.

In the real world, the Bobs outnumber the Joes 100 to 1.

With that in mind, let's go back over a hundred years.

For those of you who don't know, The Jungle was a muckraking novel written by a socialist named Upton Sinclair in 1906. His purpose was to expose the "exploitation" of workers in the meat packing industry, but his graphic description of the unsanitary conditions in the factories is what everyone who read the book focused on. As Sinclair himself put it: "I aimed at the public's heart, and by accident I hit it in the stomach."

Progressive Teddy Roosevelt was president at the time, and letters were pouring in to him to "do something" about the meat packing industry.

From Sinclairs autobiography:



In other words, the USDA was totally corrupt over a hundred years ago, and government agencies get worse over time, not better.

As a result of The Jungle, the government passed the Federal Meat Inspection Act.

This was Sinclair's reaction to the law:



Of course, he was correct. Political regulation is a burden which is much, much easier for big corporations to comply with than for smaller firms, and big corporations can afford to lobby for the right kind of regulations while at the same time controlling the regulators who enforce them.

The progressive regulatory state really is the best friend a big corporation ever had.

The problem with your post is that Sinclair still wanted government regulation...he just wanted it done right and was mad that he didn't get it.

 

[Chomsky]

Seat belts were invented by the market, not the government. If people want safety, then it will be profitable to give it to them.



Mandating fuel efficiency is downright stupid due to the law of demand. If cars get better mileage, then people just drive more. Furthermore the complexity needed to meet these idiotic mandates have an enormous cost, which people like you ignore.

If seat belts were a market driven product, why did every state in the union have to make laws mandating the public use them? I'll tell you why - the insurance companies demanded it.

I believe you're selling revisionist history here, because that's not what I remember going down.

 

[aociswundumho]

The problem with your post is that Sinclair still wanted government regulation...he just wanted it done right and was mad that he didn't get it.

What does "done right" mean?

 

[Jason Warfield]

The problem with little to no regulation is that much like communism, the idea suffers from a major flaw.

People.

If you give folks the choice to do the right thing, or make money without any regard to ethics or safety....people will overwhelmingly choose to make money without any regard to ethics or safety.

 

[Jason Warfield]

What does "done right" mean?

You posted it within the reply that Sinclair gave to Teddy: " If Roosevelt really wanted to know anything about conditions in the yards, he would have to make a secret and confidential investigation."

 

[Slartibartfast]

There's a reason many US food products are banned in Europe.

Europe is better for it. Most US food is crap.

 

[Chomsky]

Probably the best argument against government regulation is the fact that the incentives facing individual government regulators are all backwards.

Consider two different government regulators who oversee large corporations. We'll call them Joe and Bob.

Joe doesn't make life easy for the corporations. He makes decisions based on what's best for society. He will receive zero recognition for this, and when he retires, he will have his government pension.

Bob does his job much differently. He chooses to "play ball" with the executives of the corporations he regulates, and in return, the big corporations provide cushy jobs for Bob's friends and family members. When Bob retires from "public service", he is given a lucrative consulting gig for one of the corporations he used to regulate. That's on top of his government pension.

In the real world, the Bobs outnumber the Joes 100 to 1.

With that in mind, let's go back over a hundred years.

For those of you who don't know, The Jungle was a muckraking novel written by a socialist named Upton Sinclair in 1906. His purpose was to expose the "exploitation" of workers in the meat packing industry, but his graphic description of the unsanitary conditions in the factories is what everyone who read the book focused on. As Sinclair himself put it: "I aimed at the public's heart, and by accident I hit it in the stomach."

Progressive Teddy Roosevelt was president at the time, and letters were pouring in to him to "do something" about the meat packing industry.

From Sinclairs autobiography:



In other words, the USDA was totally corrupt over a hundred years ago, and government agencies get worse over time, not better.

As a result of The Jungle, the government passed the Federal Meat Inspection Act.

This was Sinclair's reaction to the law:



Of course, he was correct. Political regulation is a burden which is much, much easier for big corporations to comply with than for smaller firms, and big corporations can afford to lobby for the right kind of regulations while at the same time controlling the regulators who enforce them.

The progressive regulatory state really is the best friend a big corporation ever had.

And what alternative do you suggest?

 

[Peter]

The problem with little to no regulation is that much like communism, the idea suffers from a major flaw.

People.

If you give folks the choice to do the right thing, or make money without any regard to ethics or safety....people will overwhelmingly choose to make money without any regard to ethics or safety.

Companies have shown time and again a total disregard for the health and safety of staff and customers if they think they can make some extra money.

Just a casual look at what Dupont did with the non-stick pans situation proves how far they're willing to go.

Dark Waters (2019 film) - Wikipedia

en.m.wikipedia.org

chemicals

 

[aociswundumho]

Do you deny that car companies failed to add safety features until they were forced to by regulation?

No, I don't deny it at all.

Why do you assume that some idiot politician can determine the proper trade-offs between safety and cost for hundreds of millions of different people?

 

[Chomsky]

Europe is better for it. Most US food is crap.

And pass on this fine dining, intellectually stimulating entertainment, and healthy family lifestyle & bonding?

 

[reflechissez]

And what alternative do you suggest?

none

 

[Peter]

No, I don't deny it at all.

Why do you assume that some idiot politician can determine the proper trade-offs between safety and cost for hundreds of millions of different people?

Becauseb the car companies abjectly failed to add safety systems to protect customers and so the regulators stepped in.
That's the whole point of regulations that you loathe so much.

 

[Chomsky]

none

. . .

 

[Helix]

We're much better off with regulation and oversight, especially in the food industry.

 

[aociswundumho]

Becauseb the car companies abjectly failed to add safety systems to protect customers and so the regulators stepped in.

How does the government regulator know the proper trade-off between cost and safety for millions of different people?

For example, consider the different kind of head injuries one can suffer in a car accident.

Why don't government regulators mandate helmets for all drivers and passengers?

That's the whole point of regulations that you loathe so much.