Bryan Caplan  

If You Never Miss a Plane...

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George Stigler famously observed, "If you never miss a plane, you're spending too much time at the airport."  I heard that he wasn't amused by his secretary's corollary,  "If you never make a typo, you're typing too slow."  But he should have been.  And I'm very amused to see Robin Hanson get in touch with his inner Stigler:
Look, in any area where we let humans do things, every once in a while there will be a big screwup; that is the sort of creatures humans are. And if you won't decrease regulation without a screwup but will increase it with a screwup, then you have a regulation ratchet: it only moves one way. So if you don't think a long period without a big disaster calls for weaker regulations, but you do think a particular big disaster calls for stronger regulation, well then you might as well just strengthen regulations lots more right now, even without a disaster. Because that is where your regulation ratchet is heading.
Yep.


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COMMENTS (12 to date)
Lord writes:

Ask the wrong question, get the wrong answer. The question is not whether regulation should be strengthened or weakened but whether it is efficient and effective. All too often it is neither.

Brad Warbiany writes:

I like Mario Andretti's similar thought:

"If everything seems under control, you're just not going fast enough."

physEcon writes:

Come on, you should recognize the problem with Stigler's statement. We can not compare across indifference curves. Just because your utility function is defined such that the opportunity cost of your time and the cost of missing a flight imply a not insignificant probability of missing the flight doesn't mean that mine does also. This is most easily illustrated by trying to transfer Stigler's statement to other activities:

If you never run out of gas in the middle of the road, then you're spending too much time filling up your gas tank.

If you have never gotten arrested, then you're not using enough of your liberties/rights.


Personally I like: If you have never gotten anything less than an A, then you are spending too much time studying.

MikeP writes:

I remember the Car Talk guys saying...

If you don't kill your engine at least once a month, you are wearing out your clutch.

Jaap writes:

Don't want to spoil the nice thoughts but:

"And if you won't decrease regulation without a screwup but will increase it with a screwup, then you have a regulation ratchet: it only moves one way."

Maybe I am mistaken, but wasn't regulation loosened up a lot in the nineties, with a.o. the repeal of Glass-Steagal?

as an option's trader I got this one: if you only do profitable trades, you don't trade enough. (the idea is that if you make money 6 out of 10 times, and don't lose your shirt on the loss-making days, you are a great trader)

Ano writes:

Jaap is right: loosening regulation in the 80's and 90's is a super-important part of the story here.

It's so important that this post is either dishonest (for implying there's a policy ratchet when everyone following the story knows that there is not), or shows ignorance of some crucial historical facts that should inform our decision on what to do about regulating finance.

Phil writes:

If there's not a big offshore oil spill, we haven't been drilling enough?

MikeP writes:

If we don't suffer any terrorist attacks, we are losing too many liberties.

JLJ writes:

If you never kill yourself, you are being to careful.

Paul writes:

To a guy with a hammer, everything looks like a nail.

chipotle writes:
Tim Fowler writes:

Jaap - Re: "Maybe I am mistaken, but wasn't regulation loosened up a lot in the nineties"

Your mistaken. Regulation increased in the nineties, and in almost every other decade. Repealing Glass-Steagal, allowed investment banks to merge with deposit taking banks, but that's one highly specific reduction, in the midst of a general trend for more and more regulation.

Which isn't to say that there is never a period where the burden of regulation is reduced, but such periods are not the norm, and the nineties wasn't one.

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