The 1960s Corvair condemned by RalphNader is unsafe at any speed since inators attack it's being
increasingly accepted that we need government protection in the marketplace
today there are agencies all over Washington where bureaucrats decide
what's good for us agencies to control the prices we pay the quality of goods
we can buy the choice of products available it's already costing us more
than 5 billion dollars a year since the attack on the Corvair government has
been spending more and more money in the name of protecting the consumer this is
hardly what the third President of the United States Thomas Jefferson whose
monument this is and in mind when he defined a wise and frugal government as
one which restrains men from injuring each other and leaves them otherwise
free to regulate their own pursuits of Industry and improvement ever since the
Corvair affair the US government has increasingly been muscling in between
buyer and seller in the marketplaces of America by Thomas Jefferson standards
what we have today is not a wise and frugal government but a spendthrift and
snooping government the federal regulations that govern our lives are
available in many places one set is here in the Library of Congress in Washington
DC in 1936 the federal government established the Federal Register to
record all of the regulations hearings and other matters connected with the
agencies in Washington this is volume one number one in 1936 it took three
volumes like this to record all these matters in 1930
seven it took four and then it grew and grew and grew at first rather slowly and
gradually but even so year by year it took a
bigger and bigger pile to hold all the regulations and hearings for that year
then around 1970 came a veritable explosion so that one pile is no longer
enough to hold the regulations for that year it takes two and then free files
until on one day in 1977 September 28th the Federal Register had no fewer than
1,754 pages and these aren't exactly what you would call small pages either
many of those regulations come from this building consumer product safety our
lines appear would you hopefully thank you the Consumer Product Safety
Commission is one of the newest agencies set up in our behalf
coil help you one of its jobs is to give advice to consumers the cue that gave it
a ways that those that are involved and what has been done about the
flammability of children's garment but its main function is to produce rules
and regulations hundreds and hundreds of them designed to assure the safety of
products on the market it's hard to escape the visible hand of the Consumer
Product Safety Commission except for food and drugs ammunition and
automobiles which are covered by other agencies it has power to regulate just
about anything you can imagine already it costs 41 million dollars a
year to test and regulate all these products on our behalf and that's just
the beginning the Commission employs highly trained technicians to carry out
tests like this checking the brakes on a bike but the fact is that 80% of bike
accidents are caused by human error these tests may one day lead to safer
brakes but even that isn't sure the one thing that issue is that the regulations
that come out of here will make bikes more expensive and will reduce the
variety available yes they really are testing how matches strike and the tests
are very precise the pressure must be exactly one pound the match exactly at
right angles cancel my party thank you sir
no matter how many tests are done children's swings are never going to be
totally safe you cannot outlaw accidents if you try you end up with ludicrous
results it hardly seems possible but they really do use highly skilled people
to devise regulations that will prevent toy guns from making too big a bang consumers water take any number that the
Commission in effect is deciding what they think is good for us they are
taking away our freedom to choose consumers don't have to be hemmed in by
rules and regulations they're protected by the market itself they want the best
possible products at the lowest price and the self-interest of the producer
leads him to provide those products in order to keep customers satisfied after all if they bring goods of low
quality here you're not going to keep coming back to buy if they bring goods
that don't serve your needs you're not going to buy them and therefore they
search out all over the world the products that might meet your needs it
might appeal to you and they stand in back of them because if they don't
they're going to go out of business you see the difference between the market
and the political action the governmental agency here nobody forces
you you're free you do what you want to there's no policeman to take money out
of your pocket or to make sure that you do what you're told to over a quarter of
century ago I bought secondhand a desk calculator for which I paid $300 one of
these little calculators today which I. Can buy for $10 or so will do everything
that did and more beside what produced this tremendous improvement in
technology it was self-interest or if you prefer greed the greed of producers
who wanted to produce something that they can make a dollar on the greed of
consumers who wanted to buy things as cheaply as they could did government
play a role in this very little only by keeping the road clear for human greed
and self-interest to promote the welfare of the consumer when governments do
intervene in business innovation is titled
railroads have been regulated for nearly a century and they are one of our most
backward industries the railroad story shows what so often results from the
good intentions of consumer protection groups in the 1860s railroad rates were
lower in the United States and anywhere else in the world and many customers
thought that they were too high they complained bitterly about the profits of
the railroads now the railway men of the time had their problems - problems it
arose out of the fierce competitiveness among them many railroads all trying to
get their share of the market all trying to make a name for themselves
if you want to see what their problems were as they saw them come and have a
look at this from inside this private railroad car it may not look as if the
people who ran the railroads had any real problems some like the owner of
this private car had done very well this was the equivalent of the private jets
of today business tycoon but for each one who succeeded many didn't survive
the cutthroat competition what we have here is a railroad map of the United
States for the year 1882 it shows every railroad than in existence the country
was literally crisscross with railroads going to every remote hamlet and
covering the nation from coast to coast between points for distance like for
example New York and Chicago there might be a half a dozen lines that would be
running between those two points each of the half dozen trying to get business
with cut rates and rates would get very low
the people who benefited most from this competition
where the customer shipping goods on a long trip on the other hand between some
segments of that trip say for example Harrisburg and
Pittsburgh there might be only a single line that was running and that line
would take full advantage of its monopoly position it would charge all
that the traffic would bear the result was that the sum of the fares charged
for the short hauls was typically larger than the total sum charged for the long
haul between the two distant points of course none of the consumers complained
about the low price for the long haul but the consumer certainly did complain
about the higher prices for the short hauls and that was one of the major
sources of agitation leading ultimately to the establishment of the Interstate
Commerce Commission the cartoonists of the day delighted in pointing out that
railroads had tremendous political influence as indeed they did they use
the consumers complaints to get the government to establish a commission
that would protect the railroads interests
it took about a decade to get the Commission into full operation by that
time needless to say the consumer advocates had moved on to their next
crusade but the railway men were still there they had soon learned how to use a
commission to their own advantage they solved the long haul short haul problem
by raising the long haul rates the customers ended up paying more some
protection the first Commissioner was Thomas Cooley
a lawyer who had represented the railroads for many years
the railroads continued to dominate the Commission in the 1920s and 30s when
trucks emerged as serious competitors for long distance hauling the railroads
induced the Commission to extend control over trucking truckers in their turn
learn how to use a commission to protect themselves from competition this firm carries Freight to and from
the Dayton Ohio International Airport it's the only one serving some routes
and its customers depend on it but Dayton air freight has real problems
it's ICC license only permits it to carry Freight from Dayton to Detroit
serve other routes it's had to buy rights from other ICC license holders
including one who doesn't own a single truck it's paid as much as $100,000 a
year for the privilege our company is in the process of trying to get rights to
go there now yes we'll do that and thank you for calling sir the owners of the
firm have been trying for years to get their license extended to cover more
routes I have no argument with the people who already have ICC permits
accepting for the fact that this is a big country and since the inception of
the ICC in 1936 there has been very few entrance into the business they they do
not allow new entrants to come in and compete with those who are already in of
course Dayton air freight suffers but so do the customers who pay higher freight
charges quite frankly I don't know why the ICC is sitting on its hands doing
nothing this is the third time to my knowledge that we've supported the
application of Dayton air freight to help us save money help free enterprise
help the country save energy help help help if all comes down to
consumers ultimately going to pay for all of this and they are the bane the
ICC it has to be the blame Dayton airfreight now has many of its trucks
lying nine trucks that could be providing a valuable service far from
protecting consumers the ICC has ended up making them worse off
as far as I'm concerned there is no free enterprise and interstate commerce it no
longer exists in this country you have to pay the price and you have to pay the
price very dearly and not only means that we have to pay the price that means
that the consumer is paying that price the price consumers pay when it comes to
medicine could be their lives in the 19th century pharmacies contained an
impressive array of pills and potions most were ineffective and some were
deadly there was an outcry about drugs that maimed or killed the Food and Drug
Administration in response to consumer pressure succeeded in banning a whole
range of medicines the tonics and lotions with their
excessive claims disappeared from the market in 1962 the Kefauver amendments
gave the FDA power to regulate all drugs for effectiveness as well as for safety
today every drug marketed in the United States must pass the FDA it's clear that
this has protected us from some drugs with horrific side effects like falooda
mine and we all know of people who have benefited from modern drugs what we
don't hear much about however are the beneficial drugs that the FDA has
prohibited well if you examine the therapeutic significance of drugs that
haven't arrived in the US but are available somewhere in the rest of the
world such as in Britain you can come across numerous examples where the
patient has suffered for example there are one or two drugs called beta
blockers which now appears can prevent death after heart attack we call this
secondary prevention of coronary death after myocardial infarction which if
available here could be saving about ten thousand lives a year in the United
States in the ten years after the 1962 amendments no drug was approved for
hypertension that's for the control of blood pressure in the United States
whereas several were approved in Britain in the entire cardiovascular area only
one drug was approved in the five-year period from 67 to 72 and this can be
correlated with known organisational problems at FDA these carts are taken to
an FDA official the documents required to get just one drug approved
Wow hi there must be the new one they called me about it took six years worked
by the drug company to get this drug pack here all hundred and nineteen
bodies yes very much the invitations for the patients are
that therapeutic decisions that used to be the preserve of the doctor and the
patient are increasingly becoming made at a national level by Committees of
experts and these committees and the agency for whom they are acting the FDA
are highly skewed towards avoiding risks so there's a tendency for us to have
drugs that are safer but not to have drugs that are effective now I've heard
some remarkable statements from some of these advisory committees in considering
drugs one has seen the statement there are not enough patients with a disease
of this severity to warrant marketing this drug for general use now that's
fine if what you're trying to do is to minimize drug toxicity for the whole
population but if you happen to be one of these not enough patients and you
have a disease that is of high severity or disease that's very rare then that's
just tough luck on you for ten years mrs. Esther Osteen
suffered from severe asthma the medication she received had serious side
effects her condition was getting worse but the drug her doctor preferred was
prohibited by the FDA. So twice a year mrs.
Osteen had to set
out on a journey I had been very sick I had been in and
out of the hospital several times and they couldn't seem to find a way to
control the asthma and I had to change my lifestyle once I was out even for a
short time mainly because the cortisone derivatives were softening the bones and
causing a puffiness of the face and other changes in my body the doctors
were pretty anxious to get me off the cortisone derivatives the drunker doctor
wanted her to have had been available for use for five years in Canada once across the border at Niagara Falls
mrs. Oz Dan could make use of a prescription that she'd obtained from a
Canadian doctor all she had to do was go to any pharmacy there she could buy the drug that was
totally prohibited in her own country the drug worked immediately this one
made such a difference in my life both because of the shortness of breath being
resolved and also because now we didn't have to worry so much about the
softening of the bones fortunately once I got that medicine very quickly
everything sort of reverted back to much more of a normal lifestyle and I'm very
grateful that I was able to find relief it was easy for mrs. Osteen to get
around the FDA regulations because she happens to live near the Canadian border
not everyone is so lucky it's no accident that despite the best of
intentions the Food and Drug Administration operates so as to
discourage of the development and prevent the marketing of new and
potentially useful drugs put yourself in the position of a bureaucrat who works
over there suppose you approve a drug that turns
out to be dangerous a thalidomide your name is going to be on the front page of
every newspaper you will be in deep disgrace on the other hand suppose you
make the mistake of failing to approve a drug that could have saved thousands of
lives who will know the people whose lives might have been saved will not be
around their relatives are unlikely to know that there was something that could
have saved their lives a few doctors a few research workers they will be
disgruntled they will know you are i if we were in the position of that
bureaucrat would behave exactly the same way our own interests would demand that
we take any chance whatsoever almost of refusing to approve a good drug in order
to be sure that we never approve a bad one drug companies can no longer afford to
develop new drugs in the United States for patients with rare diseases
increasingly they must rely on drugs with high-volume sales for drug firms
have already gone out of business and the number of new drugs introduced is
going down and where will it all lead we simply
haven't learned from experience remember prohibition in a burst of moral
righteousness at the end of the First World War when many young men were
overseas the non-drinkers imposed on all of us
prohibition of alcohol they did it for our own good and there is no doubt that
alcohol is a dangerous substance unquestionably more lives are lost each
year through alcohol and also the smoking of cigarettes then through all
the dangerous substances that the FDA. Controls but where did it lead this
place is today a legitimate business it's the oldest bar in Chicago but
during Prohibition days it was a speakeasy
Al Capone bugs Moran many of the other gangsters of the day sat around this
very bar planning the exploits that made them so notorious murder extortion
hijacking bootlegging who are the customers who came here they were people
who regarded themselves as respectable individuals who would never have
approved of the activities that Al Capone and Moran were engaged in they
wanted a drink but in order to have a drink they had to break the law
prohibition didn't stop drinking but it did convert a lot of otherwise law bdn
citizens into lawbreakers fortunately we're a very long way from that today
with the prohibition on cyclamate and DDT but make no mistake about it there
is already something of a gray market in drugs that are prohibited by the FDA
many a conscientious physician feels himself in a dilemma caught between what
he regards as a welfare of his patient and strict obedience to the law if we
continue down this path there is no doubt where it will end after all if it
is appropriate for the government to protect us from using dangerous cap guns
bicycles the logic calls for prohibiting still more dangerous activities such as
hang gliding motorcycling skiing if the government is to protect us from
ingesting dangerous substances the logic calls for prohibiting alcohol and
tobacco even the people who administer the regulatory agencies are appalled at
this prospect and withdraw from it as for the rest of us we want no part of it
let the government give us information but let us decide for ourselves what
chances we want to take with our own lives as you can see all sorts of silly
things happen when government starts to regulate our lives
setting up agencies to tell us what we can buy what we can't buy what we can do
remember we started out this program with the Corvair an automobile that was
castigated by Ralph Nader is unsafe at any speed the reaction to his crusade
led to the establishment of a whole series of agencies designed to protect
us from ourselves well some 10 years later one of the
agencies that was set up in response to that move finally got around to testing
the Corvair that started the whole thing off what do you suppose they found they
spent a year and a half comparing the performance of the Corvair with the
performance of other comparable vehicles and they concluded and I quote the 1960
63 Corvair compared favorably with the other contemporary vehicles used in the
tests nowadays there are Corvair fan clubs throughout the country Corvairs
have become collectors actions consumers have given their verdict on Ralph Nader
in the government regulations as Abraham Lincoln said you can't fool all of the
people all of the time it's time all of us stopped being fooled by those
well-meaning bureaucrats who claim to protect us because they say we can't
protect ourselves the men and women who have fostered this movement have been
sincere they believe that we as consumer are not able to protect ourselves that
we need the help of a wise and beneficent government but has so often
happens the results have been very different from the intentions not only
have our pockets been picked of billions of dollars but also we are left less
well protected than we were before now back here at University of Chicago
The Consumerist themselves get their chance to argue their case I agree with
mr.
Friedman with respect to those agencies which have had the major
purpose of economically propping up a certain industry which is why consumer
advocates like myself advocate the elimination of the ICC the CA B the
Maritime Commission but when you're talking about consumer protection in the
marketplace and when you're talking about government watchdog and
competition consumers need and as every poll is showing they're demanding more
and more protection and to give just two examples of how information is simply
not enough to protect the consumer five years ago I could not have bought a
child's crib in this country it would have had to slide sufficiently close
together that I did not have to worry about the child strangling not until the
government in the Consumer Product Safety Commission stepped in to
consumers then have a choice to buy that type of a crib strangulations down 50%
and in 1975 if I had wanted to lease and Xerox machine I could not have done it
and not until the Federal Trade Commission antitrust stepped in and
forced competition into that marketplace did I have that choice and in one year
the price went from fourteen thousand dollars down to five thousand dollars
those are dollars back in our pocketbooks to say nothing of minimized
emotional trauma well probably ask Milton Friedman to come back on that
let's establish the viewpoint of our other participants and experts dr. Anand
oh what's your reaction well I think the cost is certainly outrageously large and
the benefits are trivial if any I think that perhaps Milton overstates it
slightly to make his point but basically I would have to agree with it in the
area that i know best which is the regulation of new drug development in
joan Claybrook well in the auto safety field we've saved about 55 thousand
lives and millions of injuries because of auto safety regulation since the mid
1960s I might also comment that the cost of auto crashes each year the American
public is forty eight billion dollars a year fairly substantial when you compare
it to other things much less again the human trauma bob crandall
well I think it's impossible to disagree with Milton Friedman on the effects of
economic rate regulation of the sort that the railroads
the trucking industry had been through the intent of that legislation was of
course to protect the railroads and to protect the trucks and the same thing is
true for maritime regulation what sustains regulation is sort of a
populist theory that somehow through government we will redistribute wealth
from people who owned business firms to consumers in fact it doesn't work that
way it doesn't work that way in economic regulation and there's very little
evidence that it works that way in any kind of regulation as to whether we get
any value from Health and Safety regulation I think much of it is tuned
to new to know well that's where the area I want to start with because
remember that was the first part of his argument the whole idea of consumer
product safety action by the state now is that so far working very close to it
as I know what's your reaction Kathleen Aaronic well on product safety is in the
state of that the the lawnmower industry had said for 20 years they could not
design a safe lawnmower only when the Consumer Product Safety Commission
forced them with the new standard suddenly their creative genius was
overnight they came up with net whips that were made out of plastic and they
came up with very innovative forces which is why where that government
presence actually triggered innovation that otherwise would have been left
uncovered it's very easy to see the good results the bad results it's very much
harder to see you haven't mentioned the products that aren't there because the
extra costs imposed by Consumer Product Safety Commission that have prevented
them from existing you haven't mentioned the case of the tris problem on the
inflammable garments here you had a clear case where the regulation of the
CPSC essentially had the effect of requiring all manufacturers of
children's sleepwear to impregnate them with Tris three years five years later
the regulation required the garments to be non flammable and as it happened
Triss was the most regularly readily available chemical which could do karate
as well as a hosiery but since let me finish the story first because the
second half of the story is the important part of it it turned out the
Tris was a carcinogen and five years later or three years later I'm not sure
the exact time the same agency had to prohibit the use of those sleeper
garments forced them to be disposed of at great cost to everybody concerned
let's like it's a real interesting history here 1968 when Congress passed
the flammable fabric Act they did not tell the CPSC what chemicals would
comply with that what would not and so initially when industry said we're going
to use Tris the Consumer Product Safety Commission from their initial test we're
disturbed by it and had announced informally to industry that they were
not going to allow the truth to be used industry blocked and said we're going to
take you to court because the Act only says it has to be flame-retardant you
the government cannot tell us how to comply and it was the industry that
forced the hand of CPSC away and they don't even deny that I'm not trying to
defend the industry go slowly I am NOT. Pro industry I am pro consumer unlike
you I'm not pro industry and of course industry will do a lot of bad things the
whole question at issue is what mechanism is more effective in
protecting the interests of the consumers the dispersed widespread
forces of the market take the case of the flammable fabrics suppose you have
not had the other one you believe they was right to test them don't you for a
government agency to test no not at all there are private consumer testing
agencies there's a consumers research there's consumers union you speak about
a widespread demand for more protection those agencies are those organizations
they have all these publications on cars all they do is they test the brakes and
steering they never crash it'll be the most important thing to know about a car
when you buy it is if the car crashes are you going to be killed unnecessarily
that you can't even get that information but the reason they don't test it's too
expensive that's the question why is it too expensive for him because the number
of consumers who are willing to buy their service and take it is very very
small that is not why the reason why it's because it's enormous the expense
of course but if they had a large enough number of customers if there were enough
customers enough consumer yes but that's a lot of in an egg situation which is
ridiculous it's not a chicken and egg situation a whole Legion psychological
information is important for consumers to have which is the basis and the
thesis of your argument surely that you would say that one of the things that
society does is it groups together to provide basic services to the public
Polly traffic services all sorts of basic
kinds of things of the mail service and the fire service and all the rest of it
why is it that they shouldn't even do testing of technological subjects but
the public had no way of know your or you reply won't one or two others don't
okay it seems to me that that Professor Friedman could could give a little bit
on this ground certainly in the dissemination of information is a free
writer Pro and one of the problems is that while you and I might value the
results from a consumer Union rather highly we don't have to pay for it we
can look over the shoulder of someone else borrow the magazine from the
library and so forth I wouldn't go so far as to say the government should not
at all be in the business of generating information though I am concerned about
exactly the same forces this this evil industry with them so Riley talks about
having its influence on how this information is prepared I don't see how
we guard ourselves against that but it seems to me that there is a case to be
made that the market does not supply enough information it may not but the
market supplies a great deal and there is also a free rider problem in the
negative sense on government provision of information because people who have
no use for that information are required to pay it pay for it I don't quite
understand your position on this are you saying though that there's no place for
government to test consumer product safety at all I am saying let's separate
issues I am saying there is no place for government to prohibit consumers from
buying products the effect of which will be to harm themselves there is of course
employment effect well for a moment I'm trying to separate the issues there is a
place for government to protect third parties if we go to your automobile
place children children don't aren't chooser no no they don't make choice
it's very why do parents make their choices but let's go where has it
there's no choice we can only take one issue at a time we're a little difficult
to take them all at once let's take one at a time I say there is no place for
government to require me to do something to protect myself
now if if government has information well as obtained for a moment suppose it
has information then it should make that public and available the next question
is are there circumstances under which it's appropriate for government to
collect information there may be some such circumstances they have to be
considered one at a time sometime there isn't sometimes there
isn't but you see I want to get back take your your area in Miss Claybrook
you are now involved on the airbag problem that's right if I understand the
situation I don't know anything about the technical aspects of it but the
airbag in a car is there to protect me as a dragic it doesn't prevent me from
having an accident hurting somebody else cause it's only activated by an accident
right now why shouldn't I make that decision who are you to tell me that I
have to spend whatever it is two hundred three hundred four hundred dollars on
that air band well we don't tell you that what we say is that when a car
crashes into a brick wall at 30 miles an hour the front seat
occupants have to have automatic protection built into the car as a very
quiet very why have to I don't care whether it's an airbase miles well there
are two reasons why one is it the sanctity of life it's a fairly precious
entity in this country it's more precious to me than it is to you my life
is an arbitrary premier in the urine well you know few people avoid question
sometime I do inside well then it couldn't be too precious to you because
it aboard you'd wear it all the time I. Beg your pardon
yes other things are precious too yes okay but when you think that was a
relatively cynical thing to go into but the life question is but I wanted to
answer a direct answer there is a very there's a very basic reason why and if
it's because a person does not know when they buy a car what that car is going to
do when it performs in various and sundry different ways that's number one
number two the there's a basic minimum standards performance standard it's not
a requirement you have certain pieces of products in your cars but it's a basic
performance standard built into your car that when you buy it no one's going to
have less than that so that you don't have people needlessly injured on the
highway the cost to society the cost of the individuals the trauma to their
families and so on you're suggesting theoretically that it's much better to
let people go ahead and kill themselves even though they really don't know that
that's what's going to happen to them when they have that exactly
getting the fundamental issue if you have the information give it to them the
question is not a question of giving them the information the question is
what is your right to force somebody to spend money to protect his own life not
anybody else but only himself okay and the next question I'm going to ask you
do you doubt for a moment that prohibiting alcohol would say far more
lives on the highways than an airbag seatbelts and everything else and on
what grounds are you opposed to prohibition on grounds of principle or
only because you don't think you can get it by the legislature I'm opposed to
prohibition because I don't think it's going to work that's the reason I'm
opposed I propose it to ignore I want to get the gimmick and I want to get to the
principle sure I want to suppose you could believe it would work suppose you
could relate prohibition could work would you be in favor of it
no what I am in favor of is building products I'm in favor building products
so that at least they service the public I was fascinated by some of the initial
comments everybody agrees that the old agencies are bad but the new agencies
that we haven't had a chance oh you're trying to sweeten into your
net they didn't agree agreed that but anyway what about if the basic principle
is give me the information let me choose myself if that's the ultimate goal why
is it that in any hearing that you've ever gone to and I beg anyone to find me
an exemption whether it's airbags or on des saccharin
whatever you never have the victims of the injury who lost their arm because of
a lawnmower standing up and saying thank God that you gave me the right to become
incapacitated never do you hear a victim thanking the government for backing off
never do you hear the victim of an anti-competitive action thanking the
Justice Department for not bringing a suit dr.
Linda I promised you would make
an observation on that without going into great detail now when des was used
in to preserve pregnancies in women 25 and 30 years ago there was absolutely
zero evidence that it would cause cancer in anybody certainly not in the children
of the women who were pregnant and for you to say that in 1941 studies show
just that there is no 1941 study this happens to be my area of
I'm an endocrinologist there was nothing application done let's not go any
further down that road let me ask you yeah let me ask you Misurata of course I
don't see if the problem in drugs is that there is a lack of competition the
number of drug companies in the United States and and around the world and a
lack of innovation how regulation which is designed to keep products off the
market that is further restrict the supply of drugs is going to enhance
either competition or innovation as a matter of fact everything that I have
learned in economics would tell me that that is likely to reduce innovation and
reduce competition and one of the great benefits of drug regulation is that if
I'm a pharmaceutical company with an old tried and true drug in the market I
really want the fda to keep new drugs off the market it will enhance the
market value of that drug I think that's a lesson that you learn from from
government regulation whether it's National Highway Traffic Safety
Administration regulation of fuel economy standards B of drugs Viet
pollution controls their effect is anti-competitive it's not Pro
competitive at all if I go on with Bob's point for just a moment he and I am sure
and all economists would agree that the most effective way to stimulate
competition would be to have complete free trade and eliminate tariffs the
most anti consumer measures on our statute books are restrictions on
foreign trade as a consumer federation of america testified against tariffs we
haven't asked you now that one drug in the station and here doctor I know
you're King dismiss what was your reaction to Milton's analysis of where
it's fallen down well I think it's even worse than than than Milton's analysis
or dr. Waddell's analysis of it if one could could look at the at the at the
past 25 or 30 years of new drug innovation one could see that most of
the drugs that you all would regard as miracle drugs were developed before the
key file for amendments the 1962 of nineteen sixties rules what now again
just route the 1962 amendments as Melton said added efficacy to the regulation of
safety actually it's what the regulator's did with this law
went haywire I don't see how one can object to the law in itself what what
the regulator's did was go go mad with respect to safety when the only thing
that was added to the law was a point of efficacy after all the two later twined
inextricably for a very hazardous disease like cancer you will tolerate a
very dangerous drug and for a headache it's got to be very very safe now this
we've known all the time but the the regulators have gone to the point of
utilizing some hysteria over thalidomide and new legislation which I think was
originally designed by Keith offer to get himself to be president by lowering
the cost of drugs to make regulations which are absolutely obstructive so now
instead of 75% of the new drugs used in this country being developed in this
country less than 25% of them are there being developed elsewhere now could we
just clarify this point though are you saying there should not be government
intervention in the food and drug field that kind or is it simply the policy
adopted by the fda or imposed on it by the Kefauver amendment is where it went
wrong I believe that certain guidelines are necessary and it's possible to
construct guidelines based upon the Kefauver amendment taking the
responsibility for decision-making away from the bureaucrats and the Food and
Drug Administration you say how I would say by giving it two panels of impartial
experts to make this decision now Milton do you take that you buy that nope
I don't know that why not because I I. Have never seen have you ever seen a cat
that barked not officially no well governmental agencies and governmental
laws follow their own laws just as a physical laws say that cats don't bark
these laws of social science say that when you start and set up a regulatory
agency with power those powers are going to be used I want to move on those the
third area that Milton chose the Interstate Commerce Commission and
administration now this is closer to your line of country Bobby okay what is
your reaction first to his analysis and what you think needs doing about it
well you're not going to get much dispute from I don't think anybody
sitting around here as to what the benefits of our costs of rate regulation
and transportation are the only group that you will find now supporting
continued regulation there would be the American Trucking Association and they
can't even make a very persuasive case or one that is consistent from one day
to the next there simply is no good reason for continuing this type of
regulation it might continue longer than say airline regulation did because the
number of people whose wealth has been enhanced by this regulation that is
people who drive trucks people who own licenses to operate to haul only
hardbound books between Peoria and Springfield Illinois or something of
that sort those people are very numerous and it's going to be very hard to do
something does this prove anything about the nature of government intervention
and regulation or is it simply an example or whether thing was done
extremely badly and not in the interest of public it proves I think it proves a
great deal about government regulation and it is no different I don't think in
the area of health and safety regulation let me give you one piece of information
about one area very important health and safety regulations I think even though
freedom would be in favor of in some form and that is the regulation of
pollution control or at least the establishment of property rights so as
to somehow reduce pollutant levels and what they would be if we allowed
unlimited pollution in the case of environmental policy the strongest
proponents in the Congress for environmental policy come from the
northeastern part of the United States and the weakest proponents those are the
worst voting records and the Congress come from the southwestern from Alaska
you might ask yourself why is that and one possible answer I guess is that
while the air is dirty in New York City but I don't think you'd find many people
really worried about the quality of air in New York City what they're worried
about is the future employment and the value of their assets in New York City
what would happen in the absence of environmental policy in this country is
that more business would move to the southwest and to the western part of the
United States as a result Eastern congressmen are very much in favor of a
policy which prohibits through pollution control regulations prohibits a
privatization I don't prohibit the form it takes but
they use this as an excuse just as they will use various excuses
let's say before the Miss Claybrooks agency to pump for very tight standards
or in order to promote the value of their problem before we go back to ICC
and I want to do that Milton what's your reaction to his pollution point because
I know he's very keen to interested in it well he and I would agree I would
agree with his general position that there is a role for government and
pollution I would agree second that the present
techniques of controlling pollution are terrible and they are terrible and they
are what they are for precisely the reasons he specifies because they are an
effective way in which you can use the excuse of pollution to serve some very
different objectives that's part of the way in which governments meow if I may
go back to my cat we've discussed this at greater length in a book that we've
written to go along with this program I'm free to choose the program itself
was too short for us to be able to get much in about pollution we did we really
had to skip it because it's such a complicated and difficult subject but
there is a real role for government because that is a case in which you're
protecting third parties in every one of the valid cases in my opinion for
government entering in has to do with third parties there's a case for
requiring breaks because that's to protect the person you might hit that's
wholly different there's no case for requiring an airbag in my opinion but
there is a case for requiring you would accept that distinction by the way no
because when you're injured because of a failure to use a passive restraint I'm
in a sense going to have to help pick a part of your medical bills part of your
insurance rates because they're spread across and so only on Gilligan's Island
when you have six or nine people not interacting such that all of society is
affected does your distinction have any validity goes home when you're when
you're sick from alcoholism who pays for it on the alcohol the studies I've only
shown excessive amounts of alcohol to my area back I mean what about cirrhosis of
the liver my dear it's a very con all of the read all of you because I'm all can
expand your disease especially pause on another day though various ting
distinction here that you can damage yourself you've been saying or it's up
to you you want to run the risk of damaging yourself but it but can you
make the distinction in the track to her question because she says no we mustn't
do that the fellow who hurts himself is going to
go to a government subsidized op it's all the party my ability as well answer
that issue with it because my NGO solely let me separate the two issues because I
really want to get to this because your answer is a very favorite one and there
is an element of validity to it Lauren well it's only because we've made two
mistakes but you don't have to be in a government hospital for it to be valid
because if you're going on for a moment hold on for a moment the problem with
your ins is that you're saying one wrong justifies another I believe that we
ought to have much less government intervention into those areas as well
and I don't am not willing to follow a policy which implies saying you that
every person goes around with a sign on his back saying property the US
government do not mutilate spindle or Bend do you think the government
intervention in those areas where for example the bar associations in the
eyeglass industry we're not allowing their members to advertise and then the
Federal Trade Commission stepped in and now consumers have the ability to make
those kinds of cookies you're getting into another area but the answer to
brief answer because we want to discuss it's here I am against those
governmental measures which have enabled the organizations to have the power to
prevent advertising maybe I don't know was it no out of all prandtl said Bob
Crandall said that in an area like that it would say Commerce Commission there
is nothing really be said in defense at all does anybody dissent from that or
have we knocked them down flat that happens to be the one area in which so
far as I know you cannot find editor said anywhere even one of the most
effective presentations of what was wrong with ICC was done by one of Ralph
Nader's groups maybe you were associated with that group that's the thing that
really baffles me fundamentally here are people like Ralph Nader in his groups
who look and I see soon and what is their solution to the problem more of
the same a different kind of regulation the only problem is that the wrong
people were in there regulating no no that's not true at all no that's not the
complete Nader now yes dr. Landau solutions for the medical problems have
the right people doing the render that's a complete misnomer about the difference
between ICC and health and safety regulation there are a number of
differences one is one involved the economics and the benefits of profits to
industry and the other info the sanctity of life and no little
fishes point yes the second one and it deals with your third-party relationship
is that what you're talking about there is breaks because they're going to
affect somebody else but there were also other third-party effects for example if
you don't have a helmet used by someone and you hit them with your motorcycle
you're going to have huge damage payments to make because they didn't
properly take comprar cautions on the public highways and the question is
should the public highways be used so that they're going to harm somebody else
potentially there is nothing that two people do in a world no man is an island
to himself everything has third party issues but
you've got to have a sense of proportion and the important thing is that
government intervention has third party issues when government intervenes into
these Affairs that harms third parties it picks my
pocket it reduces my freedom it restricts many activities around the
world what are the benefits and if the benefits in the auto-filled for example
are fifty five thousand deaths a that's a very dubious statistic because once
again every study has looked at the benefits and not looked at the costs oh
no that's not true at all absolutely not that they hide me in the cross in life
you'll have a look at the facts or example a virus will die no question
Hollywood just baby mini cars you love take the automobile by making
automobiles much more expensive it makes it more profitable to keep older
automobiles on the road the increased age of the automobile is an anti safety
factor by making automobiles safer so people are can drive them people drive
them faster or more recklessly than the otherwise would there are more
pedestrian deaths that's a totally unproven and indeed fully rebutted
theory and in fact all the saving lives above another numerous studies including
from Yale and Cooper from Yale and so on but they but the key issue has been
shown with by the regulation that's been in the last 10 years you've had a huge
savior in life or decrease in the the vehicle deaths that occurred the rate of
field goal death occurs over back again gentlemen you see the major effect on
the saving of life has been from 55 mile an hour I know that's not true
which is not after all in there but that is also regulation that I merrily is a
fuel regulation yeah that's right it's a regulation about but you're safe it's
not accurate that the savings in life have not
been primarily they've been a good vendor important from 55 but they've
been 55,000 deaths saved by vehicle crash safety regulation it's excuse me
there have been 55,000 desks that you have estimated to have been saved not me
the jogger excuse me other estimates as well the
estimate by Professor Sam peltzman of this university a very very serious
study estimated there were no life savings if you took into account all of
the indirect effects now maybe his study isn't exactly right I don't think it I'm
not going to try to do it but maybe the other study in the back is right here
you've gotta be even looking over to pen well if it's even in between no no I beg
your pardon if people voluntarily want to risk their lives but you are saying
again you really would not be in favor of we asked the audit of prohibiting
hang-gliding we hit the auto industry that is far more dangerous labor
prohibit the 500 let me let me answer that we asked the auto industry if they
would remove all the safety standards has been in effect since 1968 and what
would be the savings to the public if they did that and the answer that they
came back with why we couldn't remove those they expect them now the laminated
windshields that don't crack their head open and the collapsible steering
assemblies in the padded dashboard sit well the public that is now the societal
norm regulation has changed that the thinking of the public and the
understanding of what's possible and so the you know what you're suggesting is
the government regulation is willy-nilly and it produces things the public
doesn't have any and you can't take credit for everything that's happened in
this area four-wheel brakes were introduced before there were safety
regulation many of these are we doing about to go for this week what the join
us again government for the next episode in a week's time you you.
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