David R. Henderson  

Unintended Consequences, Chapter 4387

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The maximum hours question returned to the United States Supreme Court three years later in Muller v. Oregon with this twist--Oregon's maximum hour statute applied only to women. To shore up its case, Oregon hired Brandeis who wrote the first "Brandeis brief" , which supplements the bare bones of legal theory with detailed sociological and scientific argumentation. . . .

Of course Brandeis never imaged [sic] that this legislation would do anything more than reduce the hours of women workers, while everything else stayed the same. He won unanimously in the Supreme Court. But did it come as a rude shock to Brandeis that the women Oregon protected were promptly sacked by their employer Curt Muller, who replaced them with Chinese men. Modern feminists are rightly alert to the insidious effect of women-only laws, which would, happily, be struck down as unconstitutional today. Why aren't they libertarians?


This is from Richard Epstein, "The Trouble With Progressives."

HT to Daniel Shapiro.


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COMMENTS (20 to date)
Andy writes:

Well, feminists are libertarians, but only when it comes to abortion.

Tom West writes:

Let me ask you again, David. Are they any non-fraudulent contracts between capable parties that you believe *should* be disallowed by law?

If your bargaining power is strong enough, is there anything you shouldn't legally be allowed to ask for? Conversely, if your bargaining power is poor enough, is there anything you shouldn't legally be allowed to offer?

I'm not playing gotcha. I really am curious.

Silas Barta writes:

The answer is that many people, especially feminists, are too stupid to question policies that look like a "free lunch". They see employers hiring people, so they say, "hm, if we could just mandate benefit X, then HAH! That employer is trapped into providing that benefit for all employees AND all future employees! That'll stick it to the MAN!"

But employers aren't as stupid. They just pull back on hiring decisions -- "If the law is going to make every employee a potential albatross, I'm going to be MUCH more careful about who I hire. Heck, why not just avoid the trouble and stick to the 'old-boy network'? Then I don't have to go through the standard regulations about job openings..."

Great job, feminists! That *sure* helps level the playing field! Now we *all* need special connections to get a job, because employers have to be that much cautious!

Loof writes:

Putting aside the cynicism towards feminism in general as well as the specific problems of women-only legislation, the social engineering of libertarians is in a snit with social progressivism re-regulating. Personally, Loof is a rugged individualist when it comes to social progress and is against societal mechanics, libertarian and liberal; preferring coherent organization with simple regulations centered on the personal individual. Tautological de-regulation for the sake of de-regulation is as silly as re-regulation for the sake of re-regulation is stupid. However, Obama isn’t stupid on this issue (though appearing so on other issues): re-regulating the Environmental Protection Agency (EPA), the Occupational Safety and Health Administration (OSHA), as well as the Securities and Exchange Commission (SEC) has merit.

agnostic writes:

The article misses the larger point -- it isn't "the trouble with Progressives" but the trouble with democracy, as Bryan Caplan might say. It isn't as if there haven't been contrary ideologues, interest groups, etc. Why has it been the Progressive side that's so consistently triumphed, on the whole?

Answer: that's what the stupid voters demand. In a democratic age, if Progressives expected to get little sympathy from the public, they'd turn off their muckraker spigot.

agnostic writes:

Getting empirical, I couldn't find anything in the NYT about public opinion on Muller v. Oregon (although there is an editorial tongue-bathing of Brandeis). But here are just two headlines about Gallup polls from the New Deal era:

"WAGES-HOURS ACT [Fair Labor Standards Act] FAVORED IN SURVEY;
Institute of Public Opinion Finds 71% Support Aims to 29% in Opposition
56% OF EMPLOYERS FOR IT
Dr. Gallup Asserts the Results Indicate Base for Industrial Peace in Coming Year" (Jan 1939)

"Price-Wage Control Law in U.S. Is Favored By the Voters, 2 to 1, Gallup Poll Indicates

Signs are multiplying that the Roosevelt Administration will ask Congress for a law freezing all prices and wages to head off inflation. If a national plebiscite were held to get the views of the common man on such a law, it would be found that the people are far ahead of their government." (Apr 1942, my emphasis)

Tom West writes:

Great job, feminists!

Shall we get a little bit real? Much of the growth of current society's wealth is *because* feminism created cultural changes that allowed women to work, tremendously increasing our economic output.

Libertarians who berate regulation should remember that in many circumstances culture prevents economically rational decisions from being made.

Legislation often forces companies towards economic rational decisions by prohibiting cultural practices that are economically costly. (Anyone who believes that economic gain trumps cultural practices when business decisions are being made hasn't looked at human beings in the last 10,000 years.)

Of course not all or even most such regulation is like this, but it is well worth keeping in mind before mindlessly denouncing *any* regulation as evil.

Loof writes:

According to agnostic:
In a democratic age, if Progressives expected to get little sympathy from the public, they'd turn off their muckraker spigot.

Forget the spigot, it’d water down the muck much too much and make it too muddy to rake. Besides, its better to rake in the muck without becoming a muckraker: you know, the man who never looks up and only looks down, raking all filth towards himself. And, Teddy (1906) was about right saying: “the man who did nothing else was certain to become a force of evil.”

Negatively, Loof likes to look down on Greedy Archimedes leading the way for 22 big fat sheep down Dystopia Road. Positively, he rakes up all the manure, puts it in a heap (so he has to look up, waay up!), and measures it so it fits a 22:1 carbon/nitrogen ratio regulation. While sheep shit is mostly cheap carbon; Greedy’s waste is very expensive nitrogen. Together they create a perfect combination to compost. Good for the organic garden as well as great for the business of proper regulation.

David R. Henderson writes:

@Tom West,
Good question and I "know" you well enough now to know that you don't play gotcha. Your question deserves an answer that I'll give in the next few days. I can answer in a word or two but I want to justify the answer, and that takes more.
Best,
David

RL writes:

Well clearly the problem was Congress not foreseeing that they had to also add a clause to the effect no one could be fired...

Tom West writes:

David, thanks - I'll keep an eye on this space or look for a new topic if you feel it warrants one.

And indeed, the reasoning behind the answer will be much appreciated.

Loof writes:

Loof writes:
Tom West asks David:
Are they any non-fraudulent contracts between capable parties that you believe *should* be disallowed by law?

Would governments’ insurance (assurances?) for nuclear power plants be an example, David? Any insurance company take the risk? However, the government wouldn't be a “capable” party, if insane.

ps. this is a repost. Posted initially in the wrong place, again. Sorry.

Tracy W writes:

Tom West:

Libertarians who berate regulation should remember that in many circumstances culture prevents economically rational decisions from being made.

I think this is partly a matter of definition. For example, if I gain more utility by participating in my culture than the cost of whatever I need to pay to do so, then it's economically rational, just as it can be economically rational for me to spend a bit more money on food that is tasty, even if a duller diet would be cheaper and just as healthy. If I gain utility from decorating my house for Christmas and I gain that utility because I am participating in a cultural practice, then that's not economically irrational.

And at other times, culture can support economically rational decisions. For example, it is difficult to negotiate a contract if both parties don't share a language, but language is a cultural thing. Many traditional cultural practices around food, for example some of the Jewish laws about food hygiene, or the Maori practice of tapu and noa, reduce the risk of contamination of food, which does not strike me as economically irrational.


Legislation often forces companies towards economic rational decisions by prohibiting cultural practices that are economically costly.

Interesting hypothesis. Can you mention some of these cases?

And how about the number of times where legislation forces companies towards economically irrational decisions by requiring cultural practices that are economically costly? For example segregation on buses in the US south was forced on businesses by law.

Furthermore, in the case of a legislation that is put together by a government that is formed by members of that culture, I would expect that legislation to be more often influenced by economically-costly cultural practices than businesses would be, as the legislation is more removed from the costs of forcing the irrational cultural practices on others.

Anyone who believes that economic gain trumps cultural practices when business decisions are being made hasn't looked at human beings in the last 10,000 years.

Actually, it's a result of looking at human beings in the last 10,000 years that makes me think that economic gain often trumps cultural practices. Not always, but often. For example, Jesus Christ quite clearly banned charging interest, but medieval Christains got around that by giving a "gift" back with the loan. Alcohol can be bought, illegally, in Muslim countries. Jehovah Witnesses are not meant (by Jehovah Witness rules) to join groups with non-Jehovah Witnesses, but my granddad, a dairy farmer, was approached by some Jehovan Witnesses wanting to secretly join in the (entirely legal) buying cooperative he was a part of.

My own opinion is that, for many people and for a lot of time, economic gain will trump cultural practices when business decisions are being made, if the economic gain is large enough.

Of course not all or even most such regulation is like this, but it is well worth keeping in mind before mindlessly denouncing *any* regulation as evil.

What a pathetic ending, especially given your grand start. You start off by implying that legislation "often forces", but at the end all you can advise is the weaselly words to avoid "mindlessly denouncing". (They're weaselly because who would disagree with them?) You can't even say that most regulation is of the sort that forces companies towards economically rational decisions.

Tom West writes:

And how about the number of times where legislation forces companies towards economically irrational decisions by requiring cultural practices that are economically costly?

Indeed, as you point out, laws will often enforce economically destructive cultural practices. After all, law derives from a culture. But culture also derives from law, something that has not been lost on social engineers in the last century and a half. I would say that in North America, laws have been leading culture most of the time.

Interesting hypothesis. Can you mention some of these cases?

Two areas that I was thinking about when I wrote the post was laws that prohibit discrimination and address workplace safety.

In both cases, laws essentially force companies to treat certain classes of human beings as, well, human beings. Obviously this doesn't happen overnight, but things move once a law is established that hadn't for hundreds of years (except for some brave individuals here and there such as you cited in your post).

I find fascinating examples of groups of human beings who were assumed to be incapable of providing anything more than a minimal level of value (which justified dangerous working conditions, for example), who, once laws were in place that forced the company to spend more on them to keep the alive (or pay more, etc.) who were subsequently able to obtain a lot more value from the employee to an extent that far exceeded the extra costs.

What was holding the company (and its competitors) from taking these steps earlier? Culture.

As for such custom being eroded in the face economic gains, I might well be blinded by my own culture, but I could see enforced legal company regulation in many non-North American countries bringing strong economic gain over the long run. Not that it's likely to happen (law also being derived from culture).

(They're weaselly because who would disagree with them?)

Actually, quite a number of Libertarians (at least those I've debated). Maybe even our esteemed host David Henderson (we'll see in a few days). After all, such regulation is interfering with the right of two capable parties to make a mutually agreeable contract *and* attacks the right of employers to determine the metrics by which they hire, fire and promote employees.

You can't even say that most regulation is of the sort that forces companies towards economically rational decisions.

No, and I'm not trying to. I suspect most modern North American regulation is trying (for better or worse) to address "unfairness" (usually derived from what is seen as asymmetric power in negotiation). In most of these cases, the more powerful are making economically rational decisions whose cost are borne by the less powerful.

Perhaps I'm attacking a straw man when I'm attacking those who oppose almost all regulation, and there is nobody opposed to "good" regulation. But my experience is that quite a number of real people are willing to don the scare-crow suit :-).

guthrie writes:

@Tracy W

Minor quibble, but it's hardly 'quite clear' that Jesus 'banned charging interest'. Luke 6:25 could easily be understood as referring to personal altruism. It was ecumenical councils convened after Nieca that 'banned usury' for all. See: http://en.wikipedia.org/wiki/Usury

Plato, Buddha, and Mohammad were far more explicit in their condemnation of the practice.

Chris Koresko writes:

@Tom & Tracy,

Tracy wins the above exchange, in my (not especially) humble opinion, by citing specific examples and refraining from making unsupported sweeping generalizations.

Tom's position (not quite an argument as far as I can tell) reminds me of people who attribute the improvements in the safety of automobiles to stricter government regulation rather than to technological advances and higher per-capita income.

I like Tom's question to David, though, and am waiting with him to see the answer.

N.B. This blog feels like getting a graduate-level seminar course for free. Thanks to all!

Tracy W writes:

I would say that in North America, laws have been leading culture most of the time.

Another interesting hypothesis. Please tell us what evidence, if any, convinced you that your hypothesis is correct. Especially in a democracy like North America.

I find fascinating examples of groups of human beings who were assumed to be incapable of providing anything more than a minimal level of value (which justified dangerous working conditions, for example),

What a shame you don't provide us with any of these fascinating examples.

Meanwhile there are some counter-examples. In 1936 there were only 3 black PhDs employed by all of the white universities in the US, whereas 300 black chemists alone were employed by private industry. http://www.la-articles.org.uk/FL-3-4-5.pdf

What was holding the company (and its competitors) from taking these steps earlier? Culture.

This rather begs the question of whether the company and its competitors were held back in the first place.

except for some brave individuals here and there such as you cited in your post

There were only two individuals I cited in my post, Jesus Christ and my granddad. And all I mentioned my granddad doing was being approached by some Jehovah Witnesses which doesn't strike me as extraordinarly brave. Did you read my counter-examples at all?

Actually, quite a number of Libertarians (at least those I've debated). ... After all, such regulation is interfering with the right of two capable parties to make a mutually agreeable contract *and* attacks the right of employers to determine the metrics by which they hire, fire and promote employees.

Tom West, may I remind you that your claim was merely that people should not *mindlessly denounce*. Citing an example of libertarians who disagree with regulations, and then going on to give the reason that they give for their denouncing contradicts the claim that libertarians mindlessly denounce. You may not agree with the reason that Libertarians give for their denouncing of regulation, but that's quite a different matter to your initial claim.

Perhaps I'm attacking a straw man when I'm attacking those who oppose almost all regulation, and there is nobody opposed to "good" regulation.

Tom West, when you attack people who *mindlessly denounce* all regulation I strongly suspect you are indeed attacking a strawman. There are people opposed to all regulation, but I have yet to encounter one who is mindless about it. (Given the rising rates of dementia with an aging population, you can probably find one, but that sort of person is not going to be affected by any arguments you or I can make as they lack the necessary brain power).

And finally, I still think your conclusion was pathetic, you start off by making some grand claims about discrimination and culture and at the end you can't even conclude that most regulation forces people to arrive at economic rational decisions by prohibiting cultural practices that are economically costly. All you have is this wimpy statement about avoiding mindlessly denouncing regulation.

Guthrie - thanks for the clarification. It's been a long time since my Bible-reading days.

guthrie writes:

@ Tracy

No worries! I know it wasn't germane to your point... The 'no interest' ban was in place regardless, and was evaded by clever and resourceful people, regardless.

And I think I have to agree with Chris K above about the conversation you're having with Tom, but may I pose a question?

Could Civil Rights legislation be considered an example of statist regulation which is not only morally 'right', and economically rational, but that also runs counter to the prevailing culture of the South? I'm guessing this might be one specific that Tom was hinting at... what say you? (that is if you're still reading this thread... looks like David answered Tom's question today!)

Tom West writes:

Chris, indeed, I am making a more general argument based on personal observation and history. I'll happily admit that Tracy is better armed with specific facts, which do bolster her(his? - I know of a male Tracy) case.

However, I think that anyone who has worked in a larger (or smaller) business has probably had many experiences illustrating incidents where corporate culture being far more important than making money (as long as the company was doing reasonably well). My point is to bring up a few general examples where government regulation has shaken a particular culture for the eventual betterment of the company.

Now, I'm not certain whether Tracy is arguing that corporate practices like firing any woman who got married were either (1) stopped by all businesses before government regulation prohibited it (law follows culture) or (2) was economically rational, but I have a hard time believing either one.

Another interesting hypothesis [law in advance of culture]. Please tell us what evidence, if any, convinced you that your hypothesis is correct. Especially in a democracy like North America.

Examples off the top of my head would be laws prohibiting discrimination and drunk driving laws. I'm old enough to remember when government started getting tough on drunk driving and the reaction in general was outrage at the sight of respectable middle class people losing their license and getting *criminal* records all because of some minor transgression. In this case law led culture. Because it was illegal and the penalties were high, over a generation, people moved to the position where (for most) drunk driving is a fairly heinous crime.

What a shame you don't provide us with any of these fascinating examples

I can't give you figures (I make the occasional post over coffee-break, I don't research this for a living), so take it for what it's worth.

In Canada, the mining industry seems only to have adopted technology that had been used elsewhere when safety regulation and rising wages due to union action compelled them to make their individual workers much more efficient by more intense training and adoption of technology. (At least, so the timing of developments seem to suggest.)

Likewise, rises in minimum wage have, in two businesses I've had some association with, resulted in more extensive training to staff, which ended up a in a viscous spiral of increased productivity and increased training until his workers were earning close to twice minimum wage and he was doing quite well. (This was a window washing business in a personal conversation with the owner - maybe he was lying, but it didn't seem so.)

Let's be honest. If you have absolutely no experience with regulation forcing improvement by disrupting culture, then there's no way I'm going to persuade you, even if I have have a dozen case studies. So, I'll ask the readers to examine their own experience. Maybe I'll persuade a few, maybe not.

*mindlessly denounce*

You got me dead to rights. It was the wrong term altogether. I apologize to anyone I offended.

I'm (obviously) a utilitarian. What I meant by my carelessly chosen phrase was denouncing a regulation without regard to the content of the regulation itself.

I still think your conclusion was pathetic

I'll just have to live with that. Personally I am in favor of some regulations (I'm a bit leftish), but as I said above, I suspect much of modern regulation is increasing social utility (in the eyes of the population as a whole) while decreasing economic utility. Its a trade-off, and depending on the regulation, I either approve or disapprove of it. It's entirely by context.

My apologies if my rhetorical approach disappointed you.

Tracy W writes:

Tom West - I admire your intellectual honesty in your response to my criticism on the "mindlessly denouncing" point. I am particularly impressed given the normal standards of internet debate. Thank you.

And also thanks for providing examples, it makes for a more useful conversation. You do have a point that sometimes a change in the law can be the catalyst for a change in the business. I think I spoke more strongly than I could justify in my second post (even from my knowledge then, let alone from what you have added).

I am not up on the history of the drunk driving rules, but in terms of discrimation, my understanding of the history is that the cultural change came before the legal change. For example in the history of feminism, the first female doctors, journalists, etc, came before the legal changes in women's status. The arrival of feminism also appears to have been more rapid in the newer territories that were eager for more women - the first places to give women the vote were places like Wyomming, New Zealand, Australia, where there was a certain interest in being able to attract female colonists. Meanwhile countries like Japan have had formal equality before the law but not much progress in terms of social equality.
In those cases it strikes me that a social change started (pushed along consciously by a growing number of activists) and that led to the change in the law. In the case of the American South - was there a fall in levels of racism with the Civil Rights act?

And Tom West was right first time - I am a "her".

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