Courtesy of the FDA. See story here.

Libraries: Subsidized information. I like free information, but libraries get shut down when cities and states cut budgets, and they end up selling them to private companies anyway. And as access to the internet get cheaper ($300 +$25/month for high-speed) libraries are losing their purpose. Their costs are usually high too since they have no financial stake in who they hire. So libraries often hire unions out of local pressure, not prudence, and their costs go up.

My main gripe with subsidized information is it’s not an improvement upon anything. Public libraries are almost always behind the curve. If it’s free information like Wikipedia, a method of information technology that everyone can copy and compete with, I’m all for it. But libraries are free information that do nothing to improve the technology. They’re simply old methods for allowing people access. So, two things happen:

1. They get extra extra funding to vie for public attendance. If attendance is low, libraries get shut down or sold, and the library unions don’t like that. So they fight for more taxpayer money (whether that means taxing the community more or not, they don’t care, it’s a special interest group in the end).

2. They stay operating despite being bad methods of information technology. Some people can’t afford internet and computers, so libraries are good for them, but how far can we go before 10 people need libraries? Fewer and fewer people NEED libraries because the alternative technology is so cheap and far more convenient (computers, cell phone access to internet, wikipedia, google). How do you make libraries worth anything if their user bases are dwindling? If ten people in the community had no access to information except the library, is it then the time to shut them down? 100 people?

There’s no easy answer to this because it’s an entitlement issue, so you then have to find out whose brains are worth funding with taxpayer dollars. If people had to pay for the information (the costs would be FAR smaller than renting videos, maybe we could have monthly fees), then libraries could compete for lower prices and raise the money for better technology. It’d be better information too. Then you could also have libraries that better reflect the wants and needs of the community. A used book store on Shattuck in Berkeley has ZERO free-market economics books. It’s no wonder. Businesses are better at responding to the desires of the community.

Another way to look at it is the fact that most book stores let you sit down for hours on end reading without having to buy a thing. Their selections are often superior to libraries, and they’ll let you drink coffee too. I see far more people at Borders on a Wednesday afternoon than at the dingy old library down the street… though I can’t actually say I’ve been to that library. It looks like the DMV and operates 7 hour days…. except WEEKENDS! Then it’s closed. Private bookstores are far better at providing people what they want than libraries are.

I have empathy for those few people who don’t have access to information, but charities exist outside of government too. People are good at heart, and they like giving so long as they have a choice to. When they’re taxed, and local politicians heroically use it to make something “free” to the public, suddenly people don’t want to be charitable anymore.

I’d like to think that libraries provide a valuable public service. If they were entirely funded via local taxation, and members of the community could vote on how the library was funded, then it wouldn’t affect me much. But my tax money partially funds libraries in Nebraska (and all other places), even if they’re bad spenders.

http://reason.tv/video/show/777.html

Thank goodness for that. The last thing I want is more companies to peddle that poison. They could use that land to grow healthy food rather than tobacco.

Anyway, I think we’ve come full circle. I’m going to continue to share common sense, and you’re going to continue what you’re doing. In the end, it makes little difference since no government will ever deregulate to the point that you’re espousing. No government is crazy enough to defy logic by taking that risk.

Although I will say that I hope Seasteading is successful with at least one new country. It would be cool just to see them succeed at that. As I said earlier, I like the idea of utopia.

I’m getting really tired of your moral preaching. Four times you’ve told me to empathize, and every time I posit an argument from which you can’t find any of what you consider empathy, you just tell me to empathize again. It’s annoying. Please stop.

For an avid fan of European-style govnernments you might want to look into what they’re doing. The following paragraph is from http://www.cato.org/pub_display.php?pub_id=3905:

“European governments allow private companies that meet certain objective criteria to certify medical devices. That approach is less subject to abuse, better ensures patients’ access to devices, and could be an alternative to the malfunctioning American approach.”

While those companies are regulated, they do have to compete for market share in the certification industry. If they are perform bad work, they go out of business and/or face litigation, just as they would in my hypothetical.

Here are a few places where the FDA succumbs to special interests at the costs of patients:

- Removal of the contraceptive Dalkon Shield in 1974 due to media hype and despite all tests proving it was safe (ultimately proven safe in 1992)
- Ralph Nader’s Public Citizen petitioning the banning of breast implants in 1988, followed by the Association of Trial Lawyers of America jumping on board to win some lawsuits. “In contrast to the FDA in America, European authorities, except in France, continued to allow use of silicone breast implants. The British Ministry of Health conducted three separate studies on breast implant safety and exonerated the implants in each instance.”
- The tendency to regulate products that, if overused, will raise health-care costs in Medicare (special interest), like salt (http://www.washingtonpost.com/wp-dyn/content/article/2007/11/29/AR2007112902080.html)
- Drugmakers pushing for regulation of pharmaceuticals that, after patents expire, would turn up in the generic market, taking away from major drugmakers’ profits (http://www.usatoday.com/news/health/2005-02-07-pharmacists_x.htm)
- Pharmacists pushing for regulation of pharmaceuticals so that drugs go behind the counter rather than OTC, and this way they would have more control over patients’ health care. Cholesterol-reducing Zocor faced this, forcing people to pay an extra $25 to visit with a pharmacist (covering new costs thanks to the lobbying) rather than simply being able to buy the drug over the counter. Consumers lose, pharmacists win (same article above)

Maybe that’s enough for you, but I’m sure I could find more. There are plenty of them.

The agencies that win out in the certification market aren’t the ones who advertise more but the ones who give consumers what they want at the lowest cost.

As for cigarette smoking, that label on the cig. carton is paid for by cig. consumers, not you. The tax on cigarettes is extremely high, and the cost of that tax is enough to prevent small companies from entering the industry. Smaller companies could bring a useful component to the industry, namely the implementation of safer cigarettes that would be far more popular, but alas they can’t afford to enter due to the heavy burden of taxation.

“Plus, no ratings agency without government approval will ever have the power to do what a government agency can do.”…”What would you do with the Better Business Bureau?”

The BBB is a private enterprise, not governmental. It’s great for that very reason. There’s competition out there too like Vanno (http://news.cnet.com/8301-17939_109-10075507-2.html, http://www.vanno.com/). It’s proof of how the private system works so well. The ability for other ratings agencies to enter the market, especially thanks to the internet which lowers costs on ratings companies immensely, makes the BBB even better.

“The FDA, because it’s “above” the profit motive and therefore subject to the whims of congress and special interests regularly approves harmful drugs and materials entry into the market. It happens all the time with those guys.”

Okay, this is a pretty strong accusation, so I think it demands proof. Find an instance where the FDA was bought off. The FDA isn’t Congress. It’s like saying that the Supreme Court is bought by Congress. It isn’t. The separation of powers creates distance so that there is no conflict. It’s the same deal with independent prosecutors.

“No that’s wrong wrong wrong, the market reacts before they die because the ratings agency has an incentive not to approve a company’s product if it’s going to kill someone. ”

How do you know which agencies are good and which are bad? It sounds like the one which spent the most money on advertising will ultimately win.

Plus, no ratings agency without government approval will ever have the power to do what a government agency can do. “Cigarette smoking is hazardous to your health” could easily be discredited without the government seal, and without government authority to lay down the law. Just seeing that label is worth my extra tax money.

And what about the ways people do business? What would you do with the Better Business Bureau?

I know I’ve said this before, Eric, but remember two words: Empathy and Practicality.

Point taken on the Austrian schools being less scientific. I actually slapped my head when I wrote that. I appreciate the Austrian method for its lack of mathematics and focus on microeconomics rather than messy macro models.

“Can you calculate how many deaths are necessary to indicate that a company’s products are harmful? Probably not, which is a case for why you need regulation to stop the nonsense before it gets out of hand.”

Yes you can calculate it actually, just as they calculate what the penalty is for when a death happens on the job. They have numbers for all that stuff, and the risks would be built into the market, not arbitrarily chosen by a government board.

“The FDA may not be able to stop everything, but it probably acts a hell of a lot faster than the market to weed out the bad companies when the shit does hit the fan.”

How do you know that? It’s never been done for food safety. The closest we’ve gotten is in the organic foods market. Anyone savvy in organic foods understands that the “USDA Organic” stamp means jack sh*t. That’s why reputable organic food companies use a secondary rating agency, a private one, in conjunction with the USDA stamp. Smart consumers look for the secondary stamp when buying products. Unsmart customers are getting overpriced non-organic food out of the deal. Here’s a little snip of info from Wikipedia that can give you an idea of how useful the USDA stamp has been:

“In August 2008 the NOP announced that 15 of 30 federally accredited organic certifiers had been placed on probation for various violations of USDA organic standards.[4]”
http://en.wikipedia.org/wiki/National_Organic_Program

I’m proposing a non-regulatory model that’s profit-based so that there’s an INCENTIVE not to make people sick or kill them. Why would a ratings agency allow something like that to pass when it’s their very livelihood at stake?

Jaehwan:

“But these are mistakes. The purpose of the FDA is to be above the profit motive.”

Very naive again. The FDA, because it’s “above” the profit motive and therefore subject to the whims of congress and special interests regularly approves harmful drugs and materials entry into the market. It happens all the time with those guys. Since the FDA is “above” profit and funded by tax dollars, when they have complaints brought against them (happens often), they still stay in business! How is that okay?

“What you’re describing is a process where you’re asking rating companies to be guided by a profit motive, and the market only reacts when people die.”

No that’s wrong wrong wrong, the market reacts before they die because the ratings agency has an incentive not to approve a company’s product if it’s going to kill someone. Testing first, if pass, approval later.

“It’s not just about dying either. What if they have carcinogenic materials that kill people years later? No thanks. I’d rather have a regulatory agency regulate them, even if it costs me money from taxation.”

This is a problem with the FDA too, so I don’t see how it applies. But profit-seeking takes a long-term view at protecting customers because no successful business has a temporary model. The FDA has no incentive to protect people in the long-run, which is why they approve ridiculous, harmful drugs year after year. They always find deficiencies in the FDA, but the solution is always “let’s spend more money.” They never take a privatized approach. They keep the monopoly in power, and it sucks money from our economy.