RE: [Forum] Quoth who?
Whenever a government creates a body to regulate a trade for the benefit of the people, the trade gains control of the body for the benefit of the trade at the expense of the people. Sorry for no help in the particular, but I remember a paper I wrote 20 years ago making this point, and almost using those words. Let me here describe the individual mechanism (as I recall): The new gov't body has a head regulator. He's new, he's important in DC. Maybe he gets wined and dined by the politicians, he certainly gets noticed by the politicians, and the news folk. For about a week. Then the news is covering something else, the politicians have other crusades. The few, low paid pro-consumer lobbyists are glad HE's responsible, and trust him to do a good job. Which he's trying to do. Of course, he HAS to talk with representatives of the regulated industry, to get basic info. He makes a lunch appointment with the enemy. But they're SO NICE!!! They buy him lunch, they are polite, they are RESPECTFUL. They care what he says, and agree he has good points. Plus, if he's not sure of some basic data, they usually have the data, and provide it. They mostly agree with all his principles, but on just this one detail, they want the regulatory phrasing to be just a little different, since it gets virtually all the benefits at less cost, saving jobs, etc. And nobody else knows or really cares about THAT detail, certainly not at the detailed level of the highly specialized experts, in the trade industry the regulatory body. And of course, the top politically appointed regulator prolly won't be a regulator FOR EVER, but his detailed, expert knowledge of the industry, and its regulations, will SURELY make him very valuable to a future employee. ... The point is not so much that the trade gains control of the body, (true), but that the body is seduced by the only serious suitor -- the trade. How could it be otherwise? (I believed it true then, have been libertarian since; and believe it now, too.) Tom Grey
Re: [Forum] Quoth who?
The idea, called regulatory capture is associated with George Stigler. Posner's paper Theories of Economic Regulation, Richard Posner, Bell Journal of Economics and management science, Vol. 5, No. 2, pp. 335-358, 1974. brought the idea ought very clearly as I recall but I am not aware of that quote in either. Alex -- Alexander Tabarrok Department of Economics, MSN 1D3 George Mason University Fairfax, VA, 22030 Tel. 703-993-2314 Web Page: http://mason.gmu.edu/~atabarro/ and Director of Research The Independent Institute 100 Swan Way Oakland, CA, 94621 Tel. 510-632-1366
Re: [Forum] Quoth who?
Posner's article on economic regulation distinguished it from social regulation, which is still a separate and largely unexplained phenomenon. See Jonathan Wiener "On the Political Economy of Global Environmental Regulation", Georgetown Law Journal, Vol. 87, #3 (February 1999). Alex Tabarrok wrote: > > >The idea, called "regulatory capture" is associated with George >Stigler. Posner's paper "Theories of Economic Regulation," Richard >Posner, Bell Journal of Economics and management science, Vol. 5, No. 2, >pp. >335-358, 1974. brought the idea ought very clearly as I recall but I am >not aware of that quote in either. > >Alex > -- Alexander Tabarrok Department of Economics, MSN 1D3 George Mason University Fairfax, VA, 22030 Tel. 703-993-2314 Web Page: http://mason.gmu.edu/~atabarro/ and Director of Research The Independent Institute 100 Swan Way Oakland, CA, 94621 Tel. 510-632-1366
RE: [Forum] Quoth who?
I remember seeing the quote recently, just don't remember where. I'm tempted to think H.L. Mencken for some reason, though. Also just reread Crisis and Leviathan and suspect it might be from there if it's not Mencken. Daniel L. Lurker Actual happiness always looks pretty squalid in comparison with the over-compensations for misery. And, of course, stability isn't nearly so spectacular as instability. And being contented has none of the glamour of a good fight against misfortune, none of the picturesqueness of a struggle with temptation, or a fatal overthrow by passion or doubt. Happiness is never grand. World Controller Mustapha, Brave New World -Aldous Huxley - Original Message - From: Grey Thomas [EMAIL PROTECTED] Date: Thursday, May 29, 2003 10:06 am Subject: RE: [Forum] Quoth who? Whenever a government creates a body to regulate a trade for the benefit of the people, the trade gains control of the body for the benefit of the trade at the expense of the people. Sorry for no help in the particular, but I remember a paper I wrote 20 years ago making this point, and almost using those words. Let me here describe the individual mechanism (as I recall): The new gov't body has a head regulator. He's new, he's important in DC. Maybe he gets wined and dined by the politicians, he certainly gets noticed by the politicians, and the news folk. For about a week. Then the news is covering something else, the politicians have other crusades. The few, low paid pro-consumer lobbyists are glad HE's responsible, and trust him to do a good job. Which he's trying to do. Of course, he HAS to talk with representatives of the regulated industry, to get basic info. He makes a lunch appointment with the enemy. But they're SO NICE!!! They buy him lunch, they are polite, they are RESPECTFUL. They care what he says, and agree he has good points. Plus, if he's not sure of some basic data, they usually have the data, and provide it. They mostly agree with all his principles, but on just this one detail, they want the regulatory phrasing to be just a little different, since it gets virtually all the benefits at less cost, saving jobs, etc. And nobody else knows or really cares about THAT detail, certainly not at the detailed level of the highly specialized experts, in the trade industry the regulatory body. And of course, the top politically appointed regulator prolly won't be a regulator FOR EVER, but his detailed, expert knowledge of the industry, and its regulations, will SURELY make him very valuable to a future employee. ... The point is not so much that the trade gains control of the body, (true), but that the body is seduced by the only serious suitor -- the trade. How could it be otherwise? (I believed it true then, have been libertarian since; and believe it now, too.) Tom Grey
