Of rats and bureaucrats: stopping young entrepeneurs from doing good

[shanek]

Check out this pair of articles:

http://www.ij.org/media/economic_liberty/az_pest_control/3_24_04pr.shtml
http://www.azcentral.com/arizonarepublic/opinions/articles/0331wed1-31.html

Quick summary: 17-year-old Christian Alf decided to help his neighbors and make a bit of spending money in the process by installing a wire mesh over his neighbor's rooftop vents, thereby helping keep rats out.

And the government didn't like it.

Well, actually, it was his corporate competitors who didn't like it, but in any decently run republic they would have been forced to react to this new competition with market forces. Instead, they fought back with government forces.

They called the Arizona Structural Pest Control Commission and said that Alf was operating a pest control business without a license. The Commission ordered Alf to shut down his business or pay a $1000 fine. Alf refused to do either. The public became outraged at the government's abuse, and after weeks of pressure the Commission bowed down to it and restored Alf's right to run his business.

And what did Alf take out of all of this?

"I’ve learned a lot about the way government works and the potential for abuse of power."

A lesson more people need to be aware of before they're found in Alf's position. This isn't an example of government gone awry, it's simply an example of government. These laws, no matter how much people say are there to help the people against big, greedy corporations, or to help the consumers, really just give those same corporations, who have the necessary political connections, the power to limit and even outlaw competition.

America is plagued with all sorts of bodies and commissions to do exactly that. They throttle free enterprise and keep talented, hardworking people out of numerous fields. The only problem is, most of them aren't 17-year-olds with stories that can draw media attention and the courage to fight the system. But that doesn't make the government's actions any less egregious.

These actions stifle competition and hurt the poor tremendously. They harm the consumer by restricting choice and keeping prices artificually high. There are thousands and thousands of people in exactly Alf's situation. And each one is an outrage.

Yet, some people just can't seem to put it together...

 

[Mr Manifesto]

So, let's see...

There's a dispute as to whether someone is running a legimate business.

The government is asked to arbitrate.

The government arbitrates... In favour of the poor teenager.

Yet government interference is bad for business.

 

[shanek]

The government arbitrates... In favour of the poor teenager.

No, the government TRIED TO SHUT HIM DOWN AND FINE HIM. They only acquiesced after a huge public outcry by the citizens, an outcry that does not exist in the vast majority of cases.

 

[Suddenly]

No, the government TRIED TO SHUT HIM DOWN AND FINE HIM. They only acquiesced after a huge public outcry by the citizens, an outcry that does not exist in the vast majority of cases.

Maybe because in the vast majority of cases the regulations lead to outcomes that the public favors?

So are you actually suggesting that the whole licencing/regulatory system is set up by large corporations to stifle competition instead of being a reaction by the public to repeated abuses and fraudulant business activity? That the "competitors" of this boy wanted investigation seeing they followed the laws and incurred the costs of licensing and were at a disadvantage of unlicensed competition?


So it's all a conspiracy?

 

[shanek]

Maybe because in the vast majority of cases the regulations lead to outcomes that the public favors?

How are those cases any different from Alfs? Is it that the public doesn't favor them, or the public has been snowed into believing (as many here have stated directly) that if the government regulates it, then it must have some good purpose?

So are you actually suggesting that the whole licencing/regulatory system is set up by large corporations to stifle competition instead of being a reaction by the public to repeated abuses and fraudulant business activity?

I'm saying that's how it is largely used.

That the "competitors" of this boy wanted investigation seeing they followed the laws and incurred the costs of licensing and were at a disadvantage of unlicensed competition?

See, that's exactly what makes regulation such a ridiculous notion. It's clear to see that the regulations empowered corporations to stifle innovation at the expense of an innocent boy and his neighbors. But if the boy isn't subject to the regulations, then neither should the other companies who are doing exactly the same thing. The only logical conclusion that gets us out of that absurd loop is that no one should be subject to regulations and should only be subject to laws that will be used against them if and only if their actions cause harm to others.

 

[Mr Manifesto]

The only logical conclusion that gets us out of that absurd loop is that no one should be subject to regulations and should only be subject to laws that will be used against them if and only if their actions cause harm to others.

But... If some people are allowed to operate without licenses (and therefore, without guarantee that they will provide a certain quality of work), and others without, isn't that harming the people who do the right thing by operating with a license?

To answer your earlier capslock, the government obviously didn't try to shut the teenager down just because they didn't like him. Someone asked the government to arbitrate. They made a move, and found out that the teenager wasn't breaking any existing rules. That's what the government does. Are you saying that the market should operate without any arbitration at all?

 

[evil sutko]

It seems to me that the regulators in this case seemed to be a little too chummy with the people they regulate. In some cases, heavy regulatory interference can sometimes be flipped into a positive for the industry being regulated. All of the red tape creates a protected industy with high barriers of entry

That outcome is a danger when regulation becomes too intense. Shanek does have a point in that regard.

 

[Suddenly]

How are those cases any different from Alfs? Is it that the public doesn't favor them, or the public has been snowed into believing (as many here have stated directly) that if the government regulates it, then it must have some good purpose?

ALFs? My favorite was the one where he tried to eat the cat.

Possible, also possible that most of the positive effect is silent in that we can't track when people decide to not do something naughty because of a regulation.

I'm saying that's how it is largely used.

That this is the effect I see as reasonable. However, I'm full against the idea that this is the intent behind the creation of regulation. That they are maybe abused sometimes is also possible, but that is debatable given that often the company is trying to make sure others are as disadvantaged by regulation as they are.

See, that's exactly what makes regulation such a ridiculous notion. It's clear to see that the regulations empowered corporations to stifle innovation at the expense of an innocent boy and his neighbors. But if the boy isn't subject to the regulations, then neither should the other companies who are doing exactly the same thing. The only logical conclusion that gets us out of that absurd loop is that no one should be subject to regulations and should only be subject to laws that will be used against them if and only if their actions cause harm to others.

I'd actually agree with this. However, losing regulation of business would require a huge expansion of the civil tort system and allowing the system to reflect the reality of the 21st century rather than the 19th. While the total number of lawsuits has increased sharply in the last 100 years, the per capita numbers are pretty much level, and that doesn't bring into account the increased numbers of interpersonal contacts and commerce that modern life offers.

I'm largely with you on this, but I'd view it more as a choice between regulation by government vs. regulation by civil tort law. I think losing the regulatory branch without adding a whole boatload of judges and courts and also modernizing tort law would be a complete disaster.

 

[EvilYeti]

More shanek-brand bizzarro logic.

1. Private industry tries to stifle young entrepeneur through underhanded tactics.

2. Government is forced to arbitrate and temporarily restricts boy from working.

3. Government, being accountable to the public, relents after public outcry and someone actually reading the rule books, determining he wasn't doing anything wrong.

4. Boy goes back to work.

And shaneks solution is to allow the same industry that colluded to destroy competition to police itself with zero accountability. Brilliant.

I would say this is a clear example of how Government regulation is supposed to work! Crooked private interests try to shut out competition through underhanded abuse of law's designed to protect the public welfare. But the Government and public cooperated together to ensure that justice is done.

P.S. I checked out the Arizona Structural Pest Control Commission, apparently most of the regulations simply define what is regarded as fraudulent behavior. I thought the LP supported the right of the gubbmint to protect its citizens from fraud?

 

[shanek]

But... If some people are allowed to operate without licenses (and therefore, without guarantee that they will provide a certain quality of work),

Your conclusion does not follow from your premise.

and others without, isn't that harming the people who do the right thing by operating with a license?

Bad assumption: license = does the right thing

Those people are harmed, not by those who operate without a license, but by those who force them to have a license to begin with.

To answer your earlier capslock, the government obviously didn't try to shut the teenager down just because they didn't like him. Someone asked the government to arbitrate. They made a move, and found out that the teenager wasn't breaking any existing rules.

No, that isn't what happend at all. You're deliberately misrepresenting the situation. They made a move, found that he WAS breaking the rules, and ORDERED him to stop under threat of a fine. It was ONLY AFTER WEEKS OF PUBLIC OUTCRY that they finally reversed their decision.

Why do you insist on using misinformation to make your point?

 

[shanek]

It seems to me that the regulators in this case seemed to be a little too chummy with the people they regulate.

Why do you say "in this case"? Isn't that pretty much always how it is?

 

[shanek]

That this is the effect I see as reasonable. However, I'm full against the idea that this is the intent behind the creation of regulation.

"Intent" doesn't enter into it. You can "intend" to cure someone's appendicitis by using a hammer. That doesn't mean it's going to work very well.

That they are maybe abused sometimes is also possible,

"Maybe abused sometimes"? Maybe you should reread the opening post—what happened to Alf is by no means atypical; it's what goes on day after day with regulatory enforcement. It just so happened that this one case was a little too close to home for so many people that it was easy to see it for what it is. But it is really not in any way different from how these regulations are applied all the time.

This isn't ABUSE of the system. It's just the system.

I'm largely with you on this, but I'd view it more as a choice between regulation by government vs. regulation by civil tort law.

I don't mind "regulation" by civil tort law so much in that they would only be punished when they were accused of violating the law. I also agree that the tort system needs massive upgrading. But I must again point out that you are ignoring another option: industry self-regulation.

 

[Mr Manifesto]

Why do you insist on using misinformation to make your point?

It must be because I eat babies for breakfast.

 

[EvilYeti]

But I must again point out that you are ignoring another option: industry self-regulation.

The same industry that colluded to shut down Alf in the first place?

 

[Jude]

The same industry that colluded to shut down Alf in the first place?

Only because they had that weapon in their arsenal.

 

[Suddenly]

"Intent" doesn't enter into it. You can "intend" to cure someone's appendicitis by using a hammer. That doesn't mean it's going to work very well.

True, but I am just pointing out the difference between an intended effect and a unintended one. Goes to morality rather than practical effect.

"Maybe abused sometimes"? Maybe you should reread the opening post—what happened to Alf is by no means atypical; it's what goes on day after day with regulatory enforcement. It just so happened that this one case was a little too close to home for so many people that it was easy to see it for what it is. But it is really not in any way different from how these regulations are applied all the time.

This isn't ABUSE of the system. It's just the system.

I really don't see the case you cite as abuse, without more detail. If I have to follow licensing requirements it is hardly abuse for me to take steps to make sure others do...

I don't mind "regulation" by civil tort law so much in that they would only be punished when they were accused of violating the law. I also agree that the tort system needs massive upgrading. But I must again point out that you are ignoring another option: industry self-regulation.

I'm not ignoring it. Self regulation and tort regulation aren't exclusive of each other. Tort regulation protects when there is an injury to an outsider. I'd hope you aren't suggesting that the industry be allowed to decide all disputes with third parties...

 

[EvilYeti]

Only because they had that weapon in their arsenal.

That "weapon" exists only to provide a mechanism to protect consumers from fraud and the private sector STILL found a way to abuse it.

Again, you expect these people to police themselves?

 

[shanek]

The same industry that colluded to shut down Alf in the first place?

Again, you're ignoring the fact that they could only do so because of government.

 

[shanek]

True, but I am just pointing out the difference between an intended effect and a unintended one. Goes to morality rather than practical effect.

Okay, fine. But it's the unintended consequences that'll get you every time. And with government, the unintended consequences are ALWAYS a big problem, and very few if any of the intended consequences actually come about.

I really don't see the case you cite as abuse, without more detail. If I have to follow licensing requirements it is hardly abuse for me to take steps to make sure others do...

I'm coming at "abuse" from a "will of the people" standpoint. When they were confronted with the harm that licensing laws actually do, they were up in arms about it. Normally, that harm is hidden to them, but this case does show that people are very much against this kind of government intervention.

Self regulation and tort regulation aren't exclusive of each other. Tort regulation protects when there is an injury to an outsider.

Okay, fair enough.

I'd hope you aren't suggesting that the industry be allowed to decide all disputes with third parties...

Allowed? Sure, if all involved parties agree to it. Maybe the word "allowed" isn't what you wanted to use there?

 

[shanek]

That "weapon" exists only to provide a mechanism to protect consumers from fraud

Okay, now it falls to you to demonstrate that it has actually done so.

Again, you expect these people to police themselves?

For the most part, yes, and it works. Government is NOT needed for the blanket control of all activity, only in those cases where harm (in the form of the initiation of force or fraud) has taken place.

 

[specious_reasons]

Again, you're ignoring the fact that they could only do so because of government.

So, the industry regulatory group would have denied Christian Alf regulatory approval. Actually, he probably wouldn't have bothered to talk to the industry group in the first place.

What if what he was doing was not considered an effective method of pest control? What if this is considered fraudulent or unsafe practice? What does the industry regulatory agency do to him?

 

[Suddenly]

Allowed? Sure, if all involved parties agree to it. Maybe the word "allowed" isn't what you wanted to use there?

I think the word "all" helps me out. If it is fairly and knowingly agreed to there is no problem with the company deciding or arbitration or whatever.

 

[EvilYeti]

Okay, now it falls to you to demonstrate that it has actually done so.

No, you are the one making the claim here. The burden of proof is on you provide evidence that either:

1. Government regulation provides no consumer protection from fraud.

2. It provides some protection, but is more often used to oppress citzens then to protect them.

And I don't want anecdotes, I wan't DATA. I'm skeptical of your claims.

For the most part, yes, and it works. Government is NOT needed for the blanket control of all activity, only in those cases where harm (in the form of the initiation of force or fraud) has taken place.

I don't believe you.

If you actually READ what the ASPCC regulations were governing pest control, you would see that most of them are just there to define what constitutes proper pest control. You do understand that before someone can be prosecuted for fraud or the initiation of force such terms HAVE to be clearly defined? Otherwise how would the business' know whether they are committing fraudulent behavior or not?

This is another fatal flaw in your bogus reasoning. You think that a few fuzzy concepts can be used to govern all aspects of human behavior. This is impossible to enforce. I'm sure Suddenly can comment on this better than I can, but laws HAVE to be very, very precisely defined in order for them to have any function. Look at Montana, for example, they were forced to put numbered speed limits back because their "reasonable and prudent" law (i.e. do not initiate force against your fellow motorists) was not enforceable.

 

[EvilYeti]

What if what he was doing was not considered an effective method of pest control? What if this is considered fraudulent or unsafe practice? What does the industry regulatory agency do to him?

In Libertania, probably send a couple of their private security force over to his parents house to warn them how dangerous it can be up on a roof.

Accidents happen, you know. If Christian would just join their union (paying 50% of his income in dues of course), they'll make sure he doesn't meet with any unfortunate mishaps.

 

[Suddenly]

This is another fatal flaw in your bogus reasoning. You think that a few fuzzy concepts can be used to govern all aspects of human behavior. This is impossible to enforce. I'm sure Suddenly can comment on this better than I can, but laws HAVE to be very, very precisely defined in order for them to have any function. Look at Montana, for example, they were forced to put numbered speed limits back because their "reasonable and prudent" law (i.e. do not initiate force against your fellow motorists) was not enforceable.

I can comment on this, but I disagree with what you are saying.

Laws don't need to be definfed to a massive degree of specificity. I'm not so sure it is even possible. Laws are better used by the legislature to express general policy decisions, thus leaving the job of translating the general policy to specific situations to the courts. The courts then develop a body of law to serve as guidance for future application. This helps guard against loopholes.

The only problem with using the court system to regulate all industries is that at present the system isn't set up to do so, and won't be without a massive, massive expansion. There are practical problems with it, but in theory it is very possible, if you consider a world where the judical branch is even half the size of all the state and federal regulatory agencies...

Criminal statutes are different. Since the stakes are high, those to be governed need to have a clearer picture of what is legal and what is not. Almost all common law is the court trying to put into practice the fuzzy idea we call "justice," and for the most part it works.

 

[shanek]

So, the industry regulatory group would have denied Christian Alf regulatory approval. Actually, he probably wouldn't have bothered to talk to the industry group in the first place.

Even if they had, they still would not have been able to shut him down and fine him.

Look at (for example) UL, learn how industry self-regulation works, then come back here and comment on it.

 

[shanek]

No, you are the one making the claim here.

And I have supported my claim. You have made a counterclaim; but now you are weaseling out of supporting your counterclaim.

1. Government regulation provides no consumer protection from fraud.

Never claimed that it did.

2. It provides some protection, but is more often used to oppress citzens then to protect them.

I've submitted reams of evidence to this over the course of my tenure on this forum.

 

[shanek]

In Libertania, probably send a couple of their private security force over to his parents house to warn them how dangerous it can be up on a roof.

Accidents happen, you know. If Christian would just join their union (paying 50% of his income in dues of course), they'll make sure he doesn't meet with any unfortunate mishaps.

It's comments like this that prove to everyone what a biased, pigheaded bigot you are and that no one should take anything you say about Libertarianism seriously.

 

[Luke T.]

Even if they had, they still would not have been able to shut him down and fine him.

Look at (for example) UL, learn how industry self-regulation works, then come back here and comment on it.

Look at toxic waste dump sites and see how industry self-regulation doesn't work.

 

[Solitaire]

For the most part, yes, and it works. Government is NOT
needed for the blanket control of all activity, only in those
cases where harm (in the form of the initiation of force or fraud)
has taken place.

What about harm that will take place?
This is the only reason you need regulation.
There was a thread asking about usery laws for socialists.
Looking at it from a libertarian perspective I say that usery must
be banned because it leads directly to the initiaion of force and fraud.
I can think of many other examples where libertarians call for regulation.

 

[Beerina]

> So are you actually suggesting that the whole
> licencing/regulatory system is set up by large corporations to
> stifle competition instead of being a reaction by the public to
> repeated abuses and fraudulant business activity?


Witness 50 years of heavy regulation in most states banning microbreweries.

And, licensing (say, of building contractors) does not keep out fraudulent people from getting licenses.

 

[EvilYeti]

Laws don't need to be definfed to a massive degree of specificity. I'm not so sure it is even possible. Laws are better used by the legislature to express general policy decisions, thus leaving the job of translating the general policy to specific situations to the courts. The courts then develop a body of law to serve as guidance for future application. This helps guard against loopholes.

IANAL, but from reading over the laws and rules governing pest control in the state of Arizona, they seem pretty darn specific!

http://www.sb.state.az.us/rules/pdf/laws.pdf

http://www.sos.state.az.us/public_services/Title_04/4-29.pdf

(I would post some examples, but acrobat won't let me cut and paste, anyone know why?)

It seems to me to be much more efficient to collect all the rules and laws in one place, so what is and is not legal behavior is clearly defined, then sell licenses to business owners after they have demonstrated familiarity with the laws. That way if they break them, commit fraud, act in an unsafe manner, etc. its a simple matter of revoking their license, without having to burden the court system with drawn out legal proceedings.

 

[EvilYeti]

And I have supported my claim. You have made a counterclaim; but now you are weaseling out of supporting your counterclaim.

No, in the example you provided the kid went back to work! Justice was ultimately served, so he got a few weeks unpaid vacation out of the whole ordeal. I'm sure all the free publicity more than made up for it.

I'll submit the same story as evidence regulation ultimately does work and that crooked private interests will do everything they can to stifle competition.

I've submitted reams of evidence to this over the course of my tenure on this forum.

I don't believe you.

 

[EvilYeti]

It's comments like this that prove to everyone what a biased, pigheaded bigot you are and that no one should take anything you say about Libertarianism seriously.

Sorry Shane, thats a real world example of what happens when labor unions regulate themselves.

I'm from New Jersey, remember?

 

[Suddenly]

IANAL, but from reading over the laws and rules governing pest control in the state of Arizona, they seem pretty darn specific!

http://www.sb.state.az.us/rules/pdf/laws.pdf

http://www.sos.state.az.us/public_services/Title_04/4-29.pdf

(I would post some examples, but acrobat won't let me cut and paste, anyone know why?)

You can cut and paste, but only if you follow some sooper seekrit process that I can figure out only half the time.

Yes, regulations are usually frightfully specific. I'm more going towards whether or not that is a good thing.

It seems to me to be much more efficient to collect all the rules and laws in one place, so what is and is not legal behavior is clearly defined, then sell licenses to business owners after they have demonstrated familiarity with the laws. That way if they break them, commit fraud, act in an unsafe manner, etc. its a simple matter of revoking their license, without having to burden the court system with drawn out legal proceedings.

That's the upside. The downside is that it is impossible to forecast all possible outcomes and circumstances, so clearly defined rules often leave huge loopholes, cause absurd results such as preventing innovation and creating perverse incentives, or also encourage angle shooting, the use of a rule as a weapon.

I'm not going to say this is a no brainer. I'm just a big advocate of judical discretion as to detail for roughly the same reason that I think a centrally planned economy is a bad idea. The world is too complex to believe that we can forecast and decide all problems before they arrive.

 

[daenku32]

So does that mean you don't need any licenses in Arizona anymore? At least for Structural Pest Control?

I mean, if I ever do that in Arizona and they complain, I guess I just need to refer to that case..

 

[shanek]

Look at toxic waste dump sites and see how industry self-regulation doesn't work.

Oh, you mean like Love Canal, which was a perfectly safe dumping site and didn't cause any problems until the GOVERNMENT bought the site and built a school district on it, over the vociferous warnings and objections of Hooker?

http://reason.com/8102/fe.ez.the.shtml

 

[shanek]

What about harm that will take place?

When psychics prove that they can predict the future, then I'll be willing to consider that. Until then, you're just punishing INNOCENT people. They have to AT LEAST make the attempt or set up the dangerous conditions in the first place.

 

[shanek]

(I would post some examples, but acrobat won't let me cut and paste, anyone know why?)

Acrobat has an option that lets the document producer prevent people from cutting and pasting.

Anyway, concentrating on the minutae of these laws is missing the point. The point is, this exact same thing happens time and time again; whenever it's exposed for what it is, the people are outraged.

That way if they break them, commit fraud, act in an unsafe manner, etc. its a simple matter of revoking their license, without having to burden the court system with drawn out legal proceedings.

And how are you going to figure out that they've committed fraud or acted in an unsafe manner without a legal proceeding, and without completely destroying due process?

 

[shanek]

No, in the example you provided the kid went back to work!

ONLY AFTER A PUBLIC OUTCRY FORCED THE GOVERNMENT TO REVERSE ITS DECISION!!!!!

Why do you people keep ignoring that?