Topic: Regulatory Studies

How TTIP Will Affect the Structure of Global Trade Policy

Swedish economist Fredrik Erixon, an authority on international trade policy, who heads up the Brussels-based think tank known as ECIPE (the European Centre for International Political Economy), was a big contributor to the discussions held this week in conjunction with Cato’s TTIP conference.  Among many other trade topics, Fredrik has written extensively on TTIP, the WTO, and how the former may impact the latter.

In his conference essay, Erixon agrees with alarmed, “pure” multilateralists that the TTIP will supplant the WTO as “the organising entity of future trade policy,” but explains why that is not necessarily a bad thing.  While he dismisses fears that the United States and European Union may be turning toward an arrangement that excludes the rest of the world, and explains how they will “leverage TTIP for global trade liberalisation,”  Fredrik does worry that TTIP – if it “succeeds” in the area of regulatory harmonization – will result in the export of failed regulatory policies to the rest of the world.

His concluding remarks on that topic: 

Currently, the differences between EU and U.S. regulations and regulatory approaches are far too wide for the TTIP to be a realistic candidate for setting the global rules in this area. But TTIP will likely push trade agreements further in the direction of prescriptive regulatory conditionality, making it harder for trade agreements in the future to advance global commercial freedom through deregulation and simple, transparent rules.

Read Erixon’s essay here; see him discuss the issues during this conference session; see all the conference essays here.

Whole Milk and Humility

Dr. Melik: This morning for breakfast he requested something called “wheat germ, organic honey and tiger’s milk.”

Dr. Aragon: [chuckling] Oh, yes. Those are the charmed substances that some years ago were thought to contain life-preserving properties.

Dr. Melik: You mean there was no deep fat? No steak or cream pies or… hot fudge?

Dr. Aragon: Those were thought to be unhealthy… precisely the opposite of what we now know to be true.

Science hasn’t yet advanced as far as Woody Allen imagined in the movie Sleeper. But the Washington Post does report on its front page today, as the House Agriculture Committee holds a hearing on the government’s official Dietary Guidelines, that decades of government warnings about whole milk may have been in error. 

In fact, research published in recent years indicates that the opposite might be true: millions might have been better off had they stuck with whole milk.

Scientists who tallied diet and health records for several thousand patients over ten years found, for example, that contrary to the government advice, people who consumed more milk fat had lower incidence of heart disease.

By warning people against full-fat dairy foods, the U.S. is “losing a huge opportunity for the prevention of disease,” said Marcia Otto, an assistant professor of epidemiology at the University of Texas, and the lead author of large studies published in 2012 and 2013, which were funded by government and academic institutions, not the industry. “What we have learned over the last decade is that certain foods that are high in fat seem to be beneficial.”

The Post’s Peter Whoriskey notes that some scientists objected early on that a thin body of research was being turned into dogma:

“The vibrant certainty of scientists claiming to be authorities on these matters is disturbing,” George V. Mann, a biochemist at Vanderbilt’s med school wrote in the New England Journal of Medicine [in 1977].

Ambitious scientists and food companies, he said, had “transformed [a] fragile hypothesis into treatment dogma.”

And not just dogma but also government pressure, official Dietary Guidelines, food labeling regulations, government support for particular lines of research, bans on whole milk in school lunches, taxes and regulations to crack down on saturated fats and then on trans fats and salt. Earlier today Walter Olson noted numerous past examples of bad government advice on nutrition.

It’s understandable that some scientific studies turn out to be wrong. Science is a process of trial and error, hypothesis and testing. Some studies are bad, some turn out to have missed complicating factors, some just point in the wrong direction. I have no criticism of scientists’ efforts to find evidence about good nutrition and to report what they (think they) have learned. My concern is that we not use government coercion to tip the scales either in research or in actual bans and mandates and Official Science. Let scientists conduct research, let other scientists examine it, let journalists report it, let doctors give us advice. But let’s keep nutrition – and much else – in the realm of persuasion, not force. First, because it’s wrong to use force against peaceful people, and second, because we might be wrong.

This last point reflects the humility that is an essential part of the libertarian worldview. As I wrote in The Libertarian Mind:

Libertarians are sometimes criticized for being too “extreme,” for having a “dogmatic” view of the role of government. In fact, their firm commitment to the full protection of individual rights and a strictly limited government reflects their fundamental humility. One reason to oppose the establishment of religion or any other morality is that we recognize the very real possibility that our own views may be wrong. Libertarians support a free market and widely dispersed property ownership because they know that the odds of a monopolist finding a great new advance for civilization are slim. Hayek stressed the crucial significance of human ignorance throughout his work. In The Constitution of Liberty, he wrote, “The case for individual freedom rests chiefly on the recognition of the inevitable ignorance of all of us concerning a great many of the factors on which the achievement of our ends and welfare depends…. Liberty is essential in order to leave room for the unforeseeable and unpredictable.” The nineteenth-century American libertarian Lillian Harman, rejecting state control of marriage and family, wrote in Liberty in 1895, “If I should be able to bring the entire world to live exactly as I live at present, what would that avail me in ten years, when as I hope, I shall have a broader knowledge of life, and my life therefore probably changed?” Ignorance, humility, toleration—not exactly a ringing battle cry, but an important argument for limiting the role of coercion in society.

Today’s scientific hypotheses may be wrong. Better, then, not to make them law.

Competition Could Propel Mankind to Mars

Humanity’s excitement about space exploration is evident, from the reaction to the recent announcement of potential water on Mars, to the box office success of The Martian–a movie about a manned mission to the red planet.  Given the public interest in space travel, why hasn’t a man or woman actually stepped foot on Mars yet? Let’s consider some key factors affecting the pace of progress.

First, there is the obvious: appropriate technology takes time to develop. The journey from rudimentary hot air balloons and gliders to supersonic jets did not happen overnight. There is good news on this front, however.  Thanks to better communications and computing, human knowledge has the potential to expand at an exponential rate.

Second, competition is a major driver of progress, and the space industry has not been subject to intense competition since the Cold War’s end. Increasing private sector involvement may change that. For example, even after civil aviation took off, flight was a luxury enjoyed by few. But as deregulation opened up the industry to more intense competition, flight rapidly became more accessible. Today, more people fly than ever.

Competition between the U.S. and the Soviet Union during the Space Race fueled most of humanity’s spaceflight achievements, but the Cold War’s conclusion brought this competition to an end. Today, governments have limited incentive to push the boundaries of the final frontier. As a result, space exploration has stagnated.

Fortunately, a new era of private space exploration may be dawning, enabling competition to once again flourish as profits drive a new space race. The conditions have never been better. There exist potential customers eager to pay large sums for the chance to go to space for a few minutes, and still others willing to leave Earth for a lifetime on Mars. Private enterprises like SpaceX, while still in their early phases, could rekindle competition and help spark a renewed sense of urgency in the realm of spaceflight.

Humanity has dreamt of space travel for as long as we have gazed up at the stars, and increased competition could help bring those dreams to fruition. This short video beautifully depicts some of the possibilities of human space exploration. You need only look back on how far humanity has come since 1915 to gain perspective on how far we may go in the next century.

Government on Nutrition: Often Wrong, Seldom in Doubt

According to Peter Whoriskey’s Washington Post report this morning, the latest conventional wisdom to reverse in the nutrition world is on whole versus low-fat milk:

U.S. dietary guidelines have long recommended that people steer clear of whole milk, and for decades, Americans have obeyed. Whole milk sales shrunk. It was banned from school lunch programs. Purchases of low-fat dairy climbed.

…[But] research published in recent years indicates that the opposite might be true: millions might have been better off had they stuck with whole milk.

Scientists who tallied diet and health records for several thousand patients over ten years found, for example, that contrary to the government advice, people who consumed more milk fat had lower incidence of heart disease.

Readers of this space will be familiar with the pattern. Previous advice from Washington about the supposed hazards of eggs and other cholesterol-laden foods, the advantages of replacing butter and other animal fats with trans fats, and the gains to be made from switching from regular to diet soda, have all had to be re-evaluated and sometimes reversed in later years. And yet some in the public health establishment — including a few who are quoted in today’s Post article— still aspire to use the power of government to coerce changes in citizens’ diet. They seem to imagine that with people like themselves in charge, next time will be different.

“Health Care’s Future Is So Bright, I Gotta Wear Shades”

If you’ve ever wondered why a person would earn (and relish) titles like “ObamaCare’s single most relentless antagonist,” “ObamaCare’s fiercest critic,” “the man who could bring down ObamaCare,” et cetera, my latest article can help you understand.

Health Care’s Future Is So Bright, I Gotta Wear Shades” is slated to appear in the Willamette Law Review but is now available at SSRN.

From the introduction:

Futurists, investors, and health-law programs all try to catch a glimpse of the future of healthcare. Lucky for you, you’ve got me. I’m from the future. I’ve travelled back in time from the year 2045. And I am here to tell you, the future of healthcare reform is awesome.

When I presented these observations at the Willamette University College of Law symposium “21st Century Healthcare Reform: Can We Harmonize Access, Quality and Cost?”, I was tickled by how many people I saw using iPhones. I mean, iPhones! How quaint. Don’t get me wrong. We have iPhones in the future. Mostly they’re on display in museums; as historical relics, or a medium for sculptors. Hipsters—yes, we still have hipsters—who wouldn’t even know how to use an iPhone, will sometimes use them as fashion accessories. Other than that, iPhones can be found propping up the short legs of coffee tables.

I also noticed you’re still operating general hospitals in 2015. Again, how quaint.

It’s not often I get to cite MLK, Bono, Justin Bieber, the Terminator, Bill and Ted’s Excellent Adventure, two Back to the Future films, and Timbuk3, all in one law-journal article.

New Policy On White Collar Prosecution Risks Scapegoating

Last week, the Department of Justice announced a new policy regarding its approach to corporate criminal investigations.  Instead of focusing first on the company and, having resolved that portion of the investigation, turning to the task of identifying potential individual criminal suspects, prosecutors are now directed to build their cases against individual wrong doers from the start.  Media coverage of this policy statement has focused on criticism levied against the administration for being too soft on Wall Street and too cozy with corporate donors.  The New York Times trotted out the old complaint that no one went to jail in the wake of the financial crisis (even though, to my knowledge, no one has ever identified a criminal law the violation of which caused any part of the crisis).  While the administration’s rhetoric about equal justice before the law is admirable, the policy memo and its surrounding coverage have a distressing whiff of scapegoating about them. 

Markets Find a Way

Under new rules in the District of Columbia, residents are allowed to possess, smoke, and grow marijuana, but they are not allowed to sell it. So, as Aaron C. Davis writes in the Washington Post, this presents an interesting question: How is the marijuana grown in D.C. supposed to get to people in the city who want to smoke it? And it turns out that in a few short months the enterprising people of Washington have found several opportunities:

A fitness instructor who took up the hobby six months ago has amassed enough pot to make tens of thousands of dollars selling it. Instead, he’s begun giving away a little bit to anyone who pays for a massage. The instructor asked not to be named out of concern that he or his home, where he sometimes serves clients, could become targets for criminals.

T-shirt vendor in Columbia Heights who declined to comment may be working in a similar gray area. College students say the roving stand has become known to include a “gift” of a bag of marijuana inside a purchase for those who tip really well. And recently, dozens of people paid $125 for a class in Northwest Washington to learn about cooking with cannabis from a home grower. Free samples were included.

Andrew Paul House, 27, a recent law school graduate, may be the best early test case for whether home growers can find a way to make money from their extra pot.

House has started a corporation and a sleek Web site to order deliveries of homegrown marijuana to D.C. residents’ doorsteps — “free gifts” in exchange for donations to the company, akin to a coffee mug given to donors by a public radio station.