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Does less regulation mean more innovation?

November 19, 2011 by B. Daniel Blatt

As I sip my morning coffee, caught this on Instapundit:

SO A 16 GB FLASH CARD FOR $15.99 is a pretty good deal. But I remember how much a 16GB hard drive used to cost, and then it seems like a ridiculously unbelievable deal. If only everything got better and cheaper they way electronics do. . . . .

UPDATE: A reader emails: “The things that don’t are usually heavily regulated by the government. Coincidence?” Probably not. . . .

Emphasis added.  It would be interesting to compare (maybe someone has done this) those industries (e.g., health care, energy, food) which have experienced accelerating costs not to mention increased bankruptcies and those flourishing.  Then, compare the regulatory burden on the floundering and the flourishing industries.

Filed Under: Big Government Follies, Entrepreneurs

Comments

  1. Cinesnatch says

    November 19, 2011 at 12:35 pm - November 19, 2011

    Dan, I hope you don’t mean there should be less regulation in food, like nutritional information.

  2. Cinesnatch says

    November 19, 2011 at 12:48 pm - November 19, 2011

    Nutritional information has made consumers more conscious about what they eat. In turn, food providers have had to innovate and change to accommodate a more health-conscious consumer base. No? I read labels and spend my money on companies who choose to use healthier, more quality ingredients. Basically, those who are vying for my dollars are winning.

  3. B. Daniel Blatt says

    November 19, 2011 at 1:18 pm - November 19, 2011

    Cinesnatch, in this case, I was thinking ethanol which diverts corn from use in producing food into agriculture.

  4. Kalroy says

    November 19, 2011 at 3:16 pm - November 19, 2011

    Also, Cinesnatch, I’d like to point out that perhaps people in your circle/world/clique read those labels, but in my blue-collar/construction/defense circle/world/clique nobody bothers to read them. So they do help some people, but not others. I think they’re an overall positive, but I doubt they do much for the majority of people who lack food allergies and don’t care what goes into their burger, fries and a coke.

  5. Ted B. (Charging Rhino) says

    November 19, 2011 at 3:26 pm - November 19, 2011

    **Sigh** I remember when we paid several-thousands-of-dollars for a 10-meg internal harddrive as an upgrade from dual 5-1/4″ floppy drives. And we wondered what in the world we possibly needed 10-megs of storage for.

    Or, when I bought my first laptop and paid $800 to have the HD upgraded from 160mB to 209mB. ( At the time it was cutting-edge; 25mHz, 3-1/2″ floppy-drive with a monochrome flat-screen. Now my most expensive doorstop….Grrrrr )

  6. BigJ says

    November 19, 2011 at 3:56 pm - November 19, 2011

    The less regulation, the faster the innovation.

  7. V the K says

    November 19, 2011 at 4:14 pm - November 19, 2011

    It is possible, and indeed, inevitable given the imperative for bureaucracies to expand their power, for food regulations to reach the point of absurdity.

    EU bans claim that water can prevent dehydration. Producers of bottled water are now forbidden by law from making the claim and will face a two-year jail sentence if they defy the edict, which comes into force in the UK next month.

  8. Kevin says

    November 19, 2011 at 5:14 pm - November 19, 2011

    Those food labels also act as a barrier to small firms because getting them done is costly and tricky. So companies limit their size to stay below the magic number that requires them to be measured.

    Good or bad, all regulation comes at a price. Currently, we don’t evaluate it. For example, the EPA has destroyed farming in parts of Texas to protect a fish with no known value other than existing. Similarly, environmental groups in Texas are trying to use the same law protect a sub-species of a common lizard so to stop drilling. Are either of these worth it? We don’t know because magic regulations were applied thru the courts and the EPA, not thru laws that would have involved discussions of pros and cons.

  9. Lori Heine says

    November 19, 2011 at 8:04 pm - November 19, 2011

    There are so many “little people” out there with great ideas. And capital for developing them is hard to come by right now. If the government would only leave them alone, there’s no telling the innovations they’d come up with, or the contributions they would make.

  10. Cinesnatch says

    November 19, 2011 at 8:36 pm - November 19, 2011

    There are so many “little people” out there with great ideas.

    Kickstarter

  11. Richard Bell says

    November 20, 2011 at 12:18 am - November 20, 2011

    No government will ever be smart enough or fluid enough to perform as well as the natural forces that guide capitalism.

  12. TGC says

    November 20, 2011 at 3:18 am - November 20, 2011

    Nutritional information has made consumers more conscious about what they eat.

    Well shit! How did humanity survive without nannies telling us what we can and can’t eat and stupid labels that nobody but the anal retentive ever read?

    I’ve said it before and I’ll say it again here. Have you looked at the labels for OTC medicine lately? All you care about is how many pills you’re supposed to take. Instead of putting the instructions on the very top, you have to search through a bunch of crap about the ingredients and what not. I bought a box of something not too long ago. I had to search all six sides of the box before I found the instructions printed on the tab. You’d think it’d be on the box. And a person could grow old and die before they got the pills out of the adult-proof packaging.

    I can’t think of very any government regulations that actually protect us and don’t screw us over.

  13. Cinesnatch says

    November 20, 2011 at 3:24 am - November 20, 2011

    nutritional labels help us make informed choices. That’s not nanny-state. That’s providing information in demand. Some people care about what they’re putting in their body.

  14. perturbed says

    November 20, 2011 at 7:46 am - November 20, 2011

    Then let the “some people” find it. It’s pretty bloody obvious when you walk under the golden arches, for example, that you’re not going to get something nutritionists would recommend. The only thing I’d defend is what McD’s Australia did a while ago, which was to put out a small guide – no larger in area than a playing card IIRC – giving the calorie exchange figures that diabetic kids needed to get their shots right afterwards. Why? Not because government forced them, as far as I know.

  15. V the K says

    November 20, 2011 at 10:02 am - November 20, 2011

    If the Government didn’t force companies to put nutrition information on their food, some companies would and some companies wouldn’t. Consumers could choose to only buy products from companies that provided such information. And we wouldn’t have a vast and expensive bureaucracy to enforce the regulation.

  16. Heliotrope says

    November 20, 2011 at 10:07 am - November 20, 2011

    It’s pretty bloody obvious when you walk under the golden arches, for example, that you’re not going to get something nutritionists would recommend.

    Even more importantly, “nutritionists” do design school lunches and prison food which are absolute abominations of good nutrition and, worse, prepared and served by the state.

    Tell us about school pizza and all the stuff made from government cheese and government flower and the tater tots and road kill meat patties with tire marks printed on them and the gravy it floats in.

    In the case of school lunches, the kid on the lunch program who is still hungry can get a second and third meal and extend his lunch time until he can’t hold anymore. Of course he is just adding on slices of pizza and pitching the rest because that is the way the regulations are written.

    Therefore, the sweet little tyke balloons up on government food and no one can interfere with his “free choice” unless he whips out a Bible and tries to pray over his slabs of pizza.

    And were does school food come from? In no small part from the warehouses of food stuffs the government piles up from all the subsidized floor prices in the highly regulated agriculture programs. Powdered eggs, powdered milk, cheese, flours of all types, soy burgers, dehydrated potatoes, mystery meat, and all the stuff McDonald’s couldn’t sell to people who walk under their golden arches.

    And prison food is loaded with carbs to make the inmates lethargic. Except those who fanatically build up their bodies so they can protect themselves from enemies real and perceived.

    New York City requires McDonald’s to post the calories on their menu boards. Big surprise. It has not changed eating habits a lick. So now the socialists want to ban salt and transfats and sugar and on and on and force people to carry salt and sugar. Meanwhile, the Starbucks model dances in the wee socialist heads. You get a skinny latte made with free trade coffee beans and a 22000 calorie muffin with butter substitute.

    And Panera, for Heaven sakes. Who is kidding whom about McDonald’s? You think that a half pound of whole grain bread is superior to a quarter pounder?

    So, McDonalds looked around and decided that a chic coffee bar and free wi-fi might help shut up the food police. And, for decades now, you have had the opportunity to read the ingredients of everything in McDonalds on a fine print poster on the wall. Furthermore, if you care to have your own copy of nutritional information of each product, just ask for one at the counter. Then super size your meal and read away.

  17. Cinesnatch says

    November 20, 2011 at 11:27 am - November 20, 2011

    You guys can talk about Mickey D’s all you want. I’m talking about the grocery store. LOL

  18. SoCalRobert says

    November 20, 2011 at 1:22 pm - November 20, 2011

    I don’t think food labels impose any significant cost to companies engaged in mass production; mom and pop farmers’ market businesses – another story.

    The trick is cost versus benefits. Regulation of the drug industry imposes cost but is, for the most part, beneficial since most of us don’t have the necessary medical, chemistry and biology backgrounds to choose medications, OTC or Rx, regardless of available information. The EU’s regulation of bent bananas and cucumbers is a good example of useless.

    A fair amount of regulation is at the behest of existing business – a way of shutting out competitors. Excluding new competition is much cheaper than R&D or improved service.

  19. Heliotrope says

    November 20, 2011 at 3:51 pm - November 20, 2011

    Let’s talk about the grocery stores. We consume tons and tons and tons of products from the grocery stores which are FDA safe and the occasional ecoli problem is no more than the occasional air liner crash: tragic, but extremely rare.

    That is the effect of reasonable and, in my opinion, necessary government regulation.

    But then the government decides to rule on what is “organic” and what is not and what constitutes “fresh” and what does not and all other sorts of excursions into marketing rather than safety.

    I have no complaint with nutritional information, but it has nothing to do with safety, unless you are part of the food police cabal. If so, all products with transfats, sodium above a minimal level, sugar, alcohol, allergy aggravating ingredients, etc. should be in a caged section where people have to sign waivers in order to shop.

    I am looking at the bag of my favorite brand of potato chips. One serving is 14% of daily serving of fat, 5% of sodium, 12% of potassium and one serving is about 9 chips.

    Now, I wonder what anyone buying a bag of chips is supposed to do with this information? You know your body mass statistics, your metabolism information, your daily caloric intake, your cholesterol and triglyceride numbers and you have charted your consumption for the day to this point and then you calculate how many chips you can consume. Right?

    Perhaps the government should finance the development of a microchip that can be implanted to keep track of what you are eating and shut down your gullet when you exceed the government approved numbers.

    I have no complaint with having the numbers available, but I am a bit more than reticent about the government becoming the health police. Unless, of course, taking health risks can be made a capital offense. Sort of a retro-active abortion scheme much like “three strikes and you are out.”

  20. Moses Lambert says

    November 20, 2011 at 3:57 pm - November 20, 2011

    AGH! Heliotrope, HUSH UP! Don’t suggest “Perhaps the government should finance the development of a microchip that can be implanted to keep track of what you are eating and shut down your gullet when you exceed the government approved numbers.” THEY’LL DO IT.

  21. TGC says

    November 20, 2011 at 8:18 pm - November 20, 2011

    To wander OT: #16 Reminds me of a danish I had on a Delta flight once. Couldn’t identify the fruit(?) filling. No idea where that came from. Had a sandwich on a BA flight from GLA to LGW which I couldn’t identify either. It was some brown stuff that had the texture of cold, lumpy gravy. Can’t recall what it tasted like, but I was starving and ate it. No, I’ve had the displeasure of eating Vegemite (Vomit-ite) and that wasn’t it. Now the Chelsea catering on Continental flights was always good eatin’.

    I always liked the vegetable beef soup in school. They would let me get extra and they even added another day for it on the menu calendar when I suggested we ought to have it more often. It wasn’t mom’s soup, but it was still pretty good.

  22. V the K says

    November 20, 2011 at 8:34 pm - November 20, 2011

    TGC, when I was in elementary school, our meals were prepared on site. There were some things that were just awful, some things that were pretty decent, and a very few things, like their peach cobbler, that were really awesome.

    About the time I finished middle school, the country centralized food service operations, but all schools on the same menu, and prepared most of the food at a central location. Supposedly, this saved money and improved nutritional standards because, hencefoth, all menus were approved by a nutritionist to comply with state and federal guidelines. Needless to say, the food abruptly became awful and the menus became far more limited. Menus were now planned by bureaucrats in some remote office with no input from students, teachers, or parents (i.e. consumers). Also, the price of a school lunch went up.

    I think people who constantly witness first hand how state interference makes things worse and yet scream for more of it must just be incredibly stupid.

  23. TGC says

    November 20, 2011 at 9:44 pm - November 20, 2011

    I can’t recall a school lunch that was inedible. I’ve always thought that if you don’t like it, you must not be that hungry.

    At one private school I attended in Jr. High, we were able to select what we wanted for lunch. They had good pizza, chicken strips, chicken noodle soup, chicken & dumplins, burgers, steakum sandwiches, hot dogs, fries etc. They had a bunch of things to choose from and you placed your order and paid with your home room teacher.

    A school I attended in 2nd grade, at a church, would get McDonald’s every Friday. We’d order & pay in the morning and they’d run pick it up. This was back when Happy Meals first came out and they had those fried cherry pies you would burn the shit out of your mouth on while consuming.

    Speaking of which, my first job was at McDonald’s and I recall having to bring in the blocks of tallow from the storage room and scooping it into the fryers. Their fries have sucked ever since they moved away from tallow. I haven’t had a pie since they went to baked ones.

  24. TGC says

    November 21, 2011 at 1:48 am - November 21, 2011

    Now what sort of safety benefit does the Dodd/Fwank law have? The banks have billions cut off so now they’re looking for ways to recoup their losses. Folks are orgasmic that they gave up on the $5 debit card fee, but while their eyes are rolled back in their heads and their toes are curled, free checking is disappearing.

    And again, thanks to liberal assholes pretending to give a shit about us, I can no longer get airline miles with my card.

  25. ILoveCapitalism says

    November 21, 2011 at 1:09 pm - November 21, 2011

    FTR: All of the food regulating, nutritional information, etc. that is done today by government mandate could be done just as well, or better, by private actors who self-regulate for the benefit of their customers.

    Lefties’ unbounded ignorance of basic economics includes their ignorance of the following: Businesses make money by pleasing their customers. Not by hurting them. By pleasing them.

    That is: At least in a free market, they do. When government regulators step in, the market is no longer free. And the business is now beholden to the government, as much or more than they are to the customer. Quality often goes down at that point, and even if it does not, the costs of doing business invariably go up. Which ultimately means: fewer jobs.

    So yes, I support ending the FDA (or more accurately, turning it into a private-funded and private-run standards body, on the Underwriters Laboratories model).

  26. ILoveCapitalism says

    November 21, 2011 at 1:13 pm - November 21, 2011

    A fair amount of regulation is at the behest of existing business – a way of shutting out competitors. Excluding new competition is much cheaper than R&D or improved service.

    Exactly. (Except that instead of “a fair amount”, I would say “most” if not “all”.) An example in financial services is Dodd-Frank, which was written largely by, and precisely for the benefit of, the biggest banks – the ones that OWS/Democrats claim to somehow be against.

  27. North Dallas Thirty says

    November 21, 2011 at 1:21 pm - November 21, 2011

    Lefties’ unbounded ignorance of basic economics includes their ignorance of the following: Businesses make money by pleasing their customers. Not by hurting them. By pleasing them.

    That is also because leftists, by nature, are in businesses in which customer service and value are irrelevant.

    Everything leftists do is projection. Everything. They know how government agencies lie and manipulate accounting, so they impose rules on the private sector. They know how government agencies obfuscate and hide information, so they impose rules on the private sector. They regularly loot set-aside money that they’re not supposed to touch for their own wasteful purposes, so they impose rules on the private sector.

    Jon Corzine proves this. He is Barack Obama’s financial go-to guy, the person who advises Barack Obama and Joe Biden, the person who exemplifies the Obama Party ideal — and he outright stole client money from accounts to pay his expenses.

    Evidently he thought he was still dealing with Social Security.

  28. ILoveCapitalism says

    November 21, 2011 at 1:38 pm - November 21, 2011

    If ever there was a poster boy for all that is criminal in the Big Goverment – Big Banking – Big Labor nexus, it’s Corzine.

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