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regulation

Regulations I: The Problem

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While we all live on earth and suffer from environmental degradation and climate change, these matters have become political weapons. On the left, the outer edges engage in attacks on the existing political and economic systems.  They tend to characterize business as willing to harm or even kill us to stack up more profits. This allows conservatives to cast those concerned with the environment as radicals who are out to destroy jobs. As such, those on the right often regard any concerns about the environment or extinction of species as leftist plots to destroy their beloved capitalism. In many cases, this view has been manufactured and fed by economic interests to a degree that results in an outright rejection of scientific evidence and empirical experience.

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Since environmental issues have become intensely political and baked into the tribal identities of the political parties it is very difficult to discuss environmental concerns rationally in the public arena. After all, if many of those in power are dedicated to denying that problems even exist, it becomes extremely difficult to work on solutions. This is analogous in some ways to trying to address drug addiction when the addict refuses to accept that there is even a problem.

In some cases there are those who have a clear economic interest in denial or opposition. For example, the heads of industry tend to want to avoid health and safety regulations that would cost them profits. It must be admitted that some regulations are needlessly burdensome, but this fact does not prove that all regulations are bad. There are regulations that are clearly just, such as those that aim at protecting people from serious health threats. These are also regulations that are just in the sense that they aim to put the burden of the costs on the industry rather than allowing them to shift costs onto others. For example, restrictions on dangerous pollutants put the cost of dealing with them on industry, rather than shifting them onto the people in the contamination areas in the form of damage to their health.

Even in cases in which regulations would impose minimal costs or even provide benefits, companies tend to fight them. This might be due to mere ignorance of the benefits. For example, the railroad owners initially opposed safety equipment for trains on the grounds of cost—but it turned out that this equipment advantageous. There is also the possible influence of ideology—that the market should be free of state regulation. Of course, this ideology seems rather tolerant of restrictive regulation that benefits the established companies (think, for example, of the effective cable monopolies). There is also a strategic advantage in opposing all regulation—if one yields nothing (even to beneficial regulation), then it is easy to hold off any other regulations. Individuals also oppose regulations for similar reasons, often under the influence of the companies that dislike those regulations.

It would, obviously enough, be wrong to try to force regulations onto companies that would be ineffective or harmful. It is equally obvious that just and beneficial regulations would be morally acceptable. Aside from those who oppose (or love) all regulations, these two claims are quite plausible. It is also obvious that people disagree about where particular regulations fall; that is, whether they are beneficial or harmful. Matters are also complicated by the obvious fact that regulations tend to involve a mix of harms and benefits and sorting them out is challenging.

While I am sometimes cast as an anti-business leftist, I do recognize the importance of companies in human civilization. I rather like living in a technological society with computers, supermarkets and airlines. That said, I also recognize the importance of having a healthy ecosystem.  So, I hold that there needs to be a careful balance between our technological civilization and the ecosystem of which we are a part. Unfortunately, the various sides have tended to weaponize these matters and demonize each other, thus making it rather difficult to create and implement rational solutions to real problems. The gist of the problem is that even reasonable proposals get made into straw men and are often attacked savagely with well-funded ad campaigns. This, obviously enough, is not conducive with creating and implementing rational and just solutions.

Since I teach philosophy professionally, I am aware of what Aristotle said long ago: reason is the weakest form of persuasion. Having taught critical thinking for decades, I know that people are best swayed by fallacies (logically defective arguments) and empty rhetoric (no argument at all). As such, the best way to motivate acceptance of rational and just regulation would be to avoid logic and use the tools of rhetoric and fallacies to get people to accept them for the wrong (or no) reasons. This can, of course, be justified on utilitarian moral grounds. However, a philosopher should feel some shame (as a philosopher) for using such methods. But, perhaps, it is possible to win people over with reason. This will be discussed in the next essay.

 

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Abortion & Regulation

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As J.S. Mill noted in his book On Liberty, people generally do not limit liberty in a principled and consistent way. Rather, they impose or oppose restrictions based on unreasoned likes and dislikes. The political, moral and legal issues of abortion are, obviously enough, areas where this occurs.

Conservatives purport to oppose regulations and favor liberty; yet they tend to support imposing strict and even harsh restrictions on abortion. Liberals purport to favor regulations to protect people, yet also tend to accept abortion. This apparent inconsistency raises the interesting problem of working out a consistent moral position regarding liberty and regulation. I will begin with the generic conservative and then move on to the generic liberal while noting that I understand there are nuanced positions.

While it is a stereotype, conservatives are often cast as opposing many regulations aimed at protecting people from harm. For example, environmental regulations are generally supposed to be aimed at protecting people from toxins. As another example, safety regulations for products and business operations are supposed to be aimed at protecting consumers and workers. Naturally enough, few conservatives will say that they oppose protecting people; however, they argue against such regulations by claiming that they harm business and thus “kill jobs” and limit profits. Some will contend that the claims about the dangers of things like pollution are simply fabrications by liberals who are motivated by their hatred of capitalism.

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Pushing aside the rhetoric, an objective look at the general conservative stance towards regulations of this sort is that they are willing to tolerate harms, such as the deaths of children from pollution, as part of the cost of economic advantages. This is a utilitarian/consequentialist approach: a certain amount of harm (pollution, safety issues, health problems, etc.) is an acceptable price to pay for the economic advantages. This is also a cost-shifting approach: the cost is moved from the business to those impacted by the weak or lack of regulations. For example, weak regulations on pollution and environmental damage allow businesses to make more profits because they do not need to pay the full costs of these harms. They are instead shifted on to the people impacted by then. To give a specific illustration, allowing toxins to go out of a factory saves the company money, but costs those exposed to the toxin in terms of their health and economically, if only from health care costs. The idea is, in general terms, that the interests of business outweigh the interests of those harmed—even when those harmed are the unborn and young children. This is a classic consequentialist approach for resolving competing interests.

In the case of abortion, the conservatives generally profess to be against it. This is generally presented in moral and religious terms of how life is sacred, that the unborn must be protected from harm, and so on. They do not, of course, present it as imposing on liberty. The obvious problem with this position on abortion is that it directly contradicts their professed position on regulations aimed at protecting people: they oppose such regulations by arguing in favor of economic interests. Obviously enough, if it is acceptable to allow harm to the unborn when doing so is in the interest of those doing the harm, this general principle must also be applied to abortion as well—it should be acceptable when the interests of the woman outweighs that of the unborn.

This line of reasoning can be countered on utilitarian grounds: allowing businesses to harm to the unborn for economic interests outweighs the harms; allowing women to have abortions when it is in their interest does not. This could also be argued by contending that women matter less (or not at all) in the calculation, unless they are in business and harming the unborn via business activity. This approach, while honest, does seem terrible: the unborn should not be harmed, unless doing so is profitable for the right economic interests. As noted above, liberals also run into a problem here.

While it is a stereotype, liberals are supposed to favor regulation that protects people—even when doing so imposes considerable economic costs. They are also supposed to be pro-choice and support the liberty of a woman to have an abortion.

When arguing for protective regulations, one approach is to do so on utilitarian grounds: protecting people from harm creates more good than bad, even when the economic harms are factored in. There is also the fairness argument: when businesses can shift the costs to the people being harmed by their activities, this is stealing from those people. And, of course, there is the more deontological approach (that actions are good or bad in themselves) that allowing people to be harmed is just wrong.

The utilitarian justification can, obviously enough, be used to justify abortion: the benefits gained outweigh the harm done. Obviously not for the unborn, though. This suggests that the same approach can also justify opposing protective regulations—if it is acceptable to kill the unborn when doing so is in one’s interest, then this would apply both to abortion and business.

The fairness argument, also quite obviously, also seems to tell against abortion: the cost is being imposed on the unborn—they are killed for the interests of another; which seems analogous to cost shifting in business. The deontological approach would also seem to tell against abortion: if regulation is needed to protect the unborn from the harm of pollution and such, then it would also be needed to protect them from abortion.

It is important to note that I am not addressing in this essay the matter of which position is correct. Rather, my objective has been to map up the conflict between views of protective regulations and abortion. Pro-life folks should be for protective regulation across the board, or have a reasonable argument why aborting the unborn is wrong but killing them through environmental pollution is acceptable. Pro-choice folks should be tolerant of the liberty to harm others when doing so is in one’s interest, or have a reasonable argument why aborting the unborn is acceptable but harming them with pollution is not. I am confident that wise thinkers can easily address these minor challenges.

 

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The Sharing Economy II: Taxes

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Sheraton Hotel
Sheraton Hotel (Photo credit: kevin dooley)

In my previous essay on the new sharing economy I discussed the matter of regulation in regards to such companies as Uber and Airbnb. In this essay, I’ll cover the subjects of taxes.

As with regulation, some people are quite opposed to taxes. Other people are fine with taxes—at least with imposing taxes on others. In general, though, people prefer to not pay taxes. As such, it is hardly a surprise that the new sharing economy includes various attempts to avoid taxes. One example of this is the case of services like Airbnb. On the face of it, these services are just providing a means by which a person can rent out his spare room, condo or apartment. For example, a person who will be in another state for a few months might use Airbnd to rent out his apartment so he can have some income to offset the rent. Looked at one way, this service is just a more organized version of the old informal economy in which people do a sublease, rent out their camp, or get a temporary tenant for their house.

One aspect of the informal economy is that taxes are usually not collected. For example, if Professor Sally informally rents out her house to her grad student Bob while she is in Europe as a visiting professor, Professor Sally and Bob will almost certainly not pay taxes—although Bill and Sally would certainly be involved with tax payments if Bob was renting a hotel room from Sally. While there are no doubt people who would like taxes paid on even informal transactions such as this, the informal nature of these transactions tend to make this impractical—this part of the traditional informal economy is small and decentralized so that having a tax system would be cost prohibitive in terms of what is gained in regards to the public good. There is also the legitimate concern that such private transactions (“okay, you can stay at my house for two months while I am in Europe, but you need to pay the utility bills, take care of the plants and walk my dog”) can fall outside of the legitimate domain of state control.

However, when a company such as Airbnd gets involved, then things change. The once purely informal economy becomes centralized around companies and there is also an increase in the scale of operations. After all, it is one thing if Professor Sally’s grad student is paying a modest fee to stay in her house while she is in Europe, it is quite another if Professor Sally starts running her house as a hotel. It also becomes a somewhat different matter if the number of people renting out property increases significantly. To be clear, there would seem to be three important changes.  The first would be the centralization. Instead of people reaching informal agreements as individuals (who often know each other), these would be actual business transactions through a central company. The second would be the character of the process—short term renting out via a company would be rather closer to the hotel model than to the old informal model. The third would be the number of people involved: the sharing economy would presumably be considerably larger than the old informal economy.

From a practical standpoint, two of the changes could be used to justify using a similar tax approach to the sharing economy as is used in the traditional business economy (such as that of hotels). To be specific, with a centralized company and a large operation the collection of taxes becomes a more practical matter.

From a moral standpoint, if it is acceptable for the businesses with the same model (such as the traditional hotel) to have taxes imposed, then the same would seem to apply to the new sharing economy. So, if Sally would have to handle taxes if she ran a traditional hotel, then she should have to do the same if she ran her sharing economy hotel through an online service like Airbnb. Or perhaps Airbnb would be the one to handle the taxes.

Naturally enough, it might be wondered why taxes should be imposed on the new sharing economy—even if the new sharing economy is rather similar to aspects of the old economy. Of course, the people who make money through sharing rides or apartments do pay taxes for that income. However, there has been some controversy over services like Airbnb paying the hotel tax.

One reason for sharing companies to pay taxes and fees like traditional companies that they are analogous to is fairness. After all, the free market is not as free if some companies enjoy special breaks. Another reason is that the taxes and fees are needed to pay the public services and infrastructure that such companies (and their sharers) utilize. It might be contended that this is already covered by the taxes paid by individuals for their income. However, by that logic, businesses would seem to be exempt from taxes and fees on the grounds that their employees pay taxes.

Also, the growth of the sharing economy imposes new costs on the community in a way comparable to the costs of having a similar business. For example, having many Uber drivers in an area is like adding a large cab company to the area. As another example, having Airbnb rentals in a community makes the area more like a hotel area, with the accompanying burden on the community. As such, if the community (which includes many people who are not part of the sharing economy) faces increased costs then it is clearly acceptable to pass these costs on to those who benefit from this new economy.

There is also the cost of regulating the industry—as noted in my previous essay, when the sharing economy becomes comparable to the normal businesses (such as hotels and cab companies), then comparable public good (such as safety) regulations should apply. Naturally, these come with costs and it makes sense that the costs should be connected to the profits, rather than just be taken from the community in general. For example, with non-professional drivers acting like cab drivers and people renting out apartments and homes like hotels, there are legitimate concerns about public safety. Cab companies and hotels bear some of the cost of their regulation and so too should the sharing companies.

Naturally, there is still the more general debate about what is a fair tax/fee and concerns about the impact of taxes on the economy. However, it seems reasonable to believe that the sharing economy is analogous to the non-sharing economy and that it should bear a fair share of costs imposed upon the community.

 

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Proposal: Transparent Lobbying

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Money
Money talks...

While I recognize that lobbying is a legitimate part of the democratic process, I also recognize that it provides an avenue by which various interests can exert undue influence in politics, often to the detriment of the general good.

I am not so foolish as to advocate banning lobbying. As I have noted, it does have a legitimate place in the process. Also it would almost certainly be all but impossible to get rid of the lobbying machinery. However, I do contend that the harmful aspects of lobbying can be reduced.

One serious problem with lobbying and its associated influence (such as corporations and other interests literally writing legislation) is that the lobbying activities are not transparent and made readily available to the public. As might be imagined, if lobbying activities were made readily available to the public, then this would have some influence on the nature of lobbying. At the very least we would know the prices at which our government is being bought and sold.

To this end I would propose that all lobbying activities involving public officials be made a matter of public record. This would include emails, meetings, letters, phone conversations, texts and so on. With today’s technology, it would be a simple matter to record meetings on video, to record phone conversations and so on. This information would the be posted on a site called lobbyist.gov. The main page for the site would have a link to individual pages for each member of congress. Each individual page would have a list of all the lobbyists who have lobbied the congressperson as well as links to records of all the lobbying. It would be mandated that the site be designed to be clearly and easily navigable so that the records could not be obscured or hidden. There would also be a large money counter for each congressperson which would track the amount of monetary value received from lobbyists and the interests they represent.

It might be objected that lobbyists have a right to secrecy. The obvious reply is that lobbyists might, but public officials do not. They are, after all, public officials. Hence, the interaction between the lobbyists and the public officials in their professional capacity would thus seem to be something that the people have a right to know about.

It might also be objected that some matters might fall under areas of legitimate secrecy, such as national security. Thus, any lobbyist who can claim this would have the right to lobby in secret. The obvious reply is that while dealings between congresspeople and certain interests (such as defense contractors) might legitimately involve secrecy, this would clearly not cover lobbying attempts. After all, while a defense contractor describing a top secret weapon would be a legitimate matter for secrecy, the process of lobbying congress to spend billions in public money on that contractor would not be a legitimate matter of secrecy.

I imagine that lobbyists would, of course, try to stuff as much secret lobbying as they could under the cloak of national security. However, this would still limit the illegitimate secrecy in substantial ways and the lobbying report should still include a report of secret lobbying that lists the name of the company and the fact that the lobbying activities were made secret for “national security” or whatever.  This secrecy should also be subject to independent review to try to reduce (however slightly) the inevitable abuse of the national security loophole.

The requirement for transparent lobbying would need to be backed up with penalties that would be sufficient to motivate lobbyists and congresspeople to follow the laws. After all, if the penalty was an ethical censure or a small fine, most congresspeople would simple break the rules relentlessly. One reasonable penalty is that violation of the transparency rules would result in the interest being served by the lobbyist(s) in question being banned from lobbying for an extended period of time and that the offending congressperson would also not be allowed to interact with lobbyists for a set amount of time per violation.

As might be imagined, opposing this sort of transparency is something both parties can agree on.

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Recurring Themes

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Interestingly, the various disasters that have been dominating recent news are playing out like bad movie sequels. To be specific, each new disaster takes the dominant theme of the previous one and then seems to try to top it. In the case of Toyota, it was found that they were a bit too cozy with the folks who were supposed to be regulating them. In the case of the financial mess, it was once again found that the regulators and the “regulated” were very cozy. It was also found that some of the foxes guarding the other foxes (to keep them from the hen house) were viewing naked foxes online. In the latest disaster, the BP oil spill, the regulatory agency folks seem to have been cozy with the drilling companies and some were also apparently viewing porn. The new twist was that at least one regulator admits to using Meth. God only knows what will be next.

Since Obama is president now, he will be criticized for these regulatory failures. However, the problems with the regulators of drilling are prior to Obama (2000-2008). While it is tempting to put the blame on the Bush administration, this problem seems to be a systemic one that crosses party lines and administrations. After all, the Obama administration is rather cozy with Wall Street.

The main problem in these cases is that there is a lack of enforced regulation that keeps the people who are supposed to be regulating from getting too cozy with the people they are supposed to regulate. In short, there is a serious problem with corruption and undue influence. While some aspects of the problem can be addressed with revised regulations (and enforcement of existing laws), regulations are only as good as the people who enforce them (or fail to do so). This indicates the classic problem of how to get ethical and competent people into such positions and how to keep them from succumbing to corruption. It is, in short, the general problem of good government.

Some obvious fixes include outlawing gifts, having regular “inspections” of regulators to determine what they are doing (or not doing), and checking for conflicts of interest (such as close relations to the folks in the industry to be regulated). Other fixes including having stronger regulations that are harder to bypass or work around. After all, weak points in the laws make it easier for corruption to grab hold.  Of course, these weak points are not the fault of the regulators-they are created by politicians by accident or by design. In the case of designed weak points and loop holes, these serve to undermine good regulatory practices by building in ways for companies to get around regulations. Typically companies have to use their influence to take advantages of weak points, which is how corruption can get started.

So, good laws and good people are the fix. As always. Good luck with that.

As a final point, I want to discuss the drugs and the porn. My rough hypothesis is that the cozy relationships played a causal role. One possibility is that corruption breeds corruption. In other words, when a person has a moral weakness in one area, it makes it easier for other moral weakness to take hold. A second possibility is that one corruption did not contribute to another, but that both are the effects of bad character. A third possibility is that the cozy relation between industry and the regulators left the regulators with little real work to do.  As the saying goes, idle hands do the devil’s work (that is, clicking links to porn).

Interestingly enough, porn would probably be a useful indicator. To be specific, if a government employee has the time to view porn at work, then s/he is probably not doing his/her job properly. As such, checking for porn in the workplace would be a good idea (and not just for the usual reasons).

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Regulating Salt

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A salt mill for sea salt.
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A proposal that the government regulate salt in foods is now being considered.  The main motivations are that attempts to curb excessive intake of salt have failed and that this excess consumption has had a serious impact on the health of Americans.

Salt is, of course, an essential part of the human diet. As such, we cannot do without it. However, excess salt (as noted above) is harmful. The main impact is that it helps elevate blood pressure and this contributes to a variety of health problems. The obvious challenge is finding a way to balance between what people need and what is actually harmful.

On one hand, it does make sense for the government to step in an regulate salt. After all, it presents a clear health risk and thus would seem to fall under the dominion of the state.  At the very least, consumers should be provided with information about the salt content in food (including that served in restaurants) so that they can make an informed choice. It also makes sense to reduce the salt content of food when possible so as to reduce the health risk to those who elect to simply eat without considering the health impact (that is, those who chose to eat in ignorance).

While some people are tossing out terms like “food police”, I am fine with there being food police. After all, I am somewhat familiar with the history of food in America and what sort of ingredients and contamination people were exposed to prior to the FDA.  Even with the FDA we still face problems (such as food poisoning)-so just imagine what it would be like without the state regulating matters.

Also, the proposal does not ban salt shakers. If it is decided that salt levels in foods will be reduced, you can still shake away to your heart’s content (and early demise). Finally, many companies already offer lower sodium products and they could expand these product lines.

On the other hand, the are some reasons to be against the regulation. Once point is that the problem with salt is not that salt itself is dangerous. Salt is not like lead or mercury. What causes the problem with salt is excessive consumption. As such, the government would not be protecting us from a dangerous substance, but attempting to do something about excess consumption. This, it might be argued, is not actually something the state has the right to do. To use an analogy, eating excess calories presents a health threat to people. However, the government does not seem to have the right to mandate that food contain less calories so as to address this problem. After all, calories are not bad, it is the excessive consumption that is bad.  It might thus be argued that  since people have the freedom to consume in excess, they should also have the freedom to consume excess salt as well. Of course, this argument could also be turned around to be used as an argument for government regulation of calories. Interestingly, arguments for not regulating salt based on the right of free choice could also be deployed to argue for not regulating drugs like marijuana and also for allowing people to chose to marry the same sex. Of course, folks tend to only want people to have the freedom to choose what they want them to choose.

Another relevant point is that this sort of regulation might be pointless. Even if the salt in food is reduced, then this might have little impact. After all, if the food is not salty enough for people’s taste, then they will probably just salt it (as people already do).  Or people will simply eat more until their craving for salt is satisfied. As such, regulating salt content might not be worth the cost of the regulation.

My considered view is that the salt in many foods is needlessly excessive and should be reduced, mainly to help reduce the harm people inflict on themselves in ignorance. After all, since too much salt is harmful and people seem unwilling or unable to voluntarily curb their salt intake, then the state should step in to protect them.

However, people should still have the choice to harm themselves if they really want excess salt. However, this should be a matter of informed choice and not the result of ignorant consumption. However, the excessively salty foods should probably have a slight tax on them that would be used to help offset the costs to Medicare/Medicaid  resulting from such excess salt consumption. After all, while people should have the free choice to harm themselves, the medical care to deal with their poor choices is not (yet) free.

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