David R. Henderson  

Proposition 65: When Government Cries Wolf

Margaret Thatcher's Legacy... Immigration and Bubbles...

There was some confusion a few days ago about whether certain kinds of licorice are legal in California. I had pointed out that an out-of-state firm was unwilling, because of Proposition 65, to ship its licorice to California. That does not mean that the licorice is illegal in California. It is not. But, under Proposition 65, it must be accompanied by a warning label saying that certain ingredients may cause cancer.

Presumably, the firm was not willing to add such a label. Why? Think about the rest of the U.S. market outside California, which would probably be over 85% of the market. Californians have learned to ignore Proposition 65 labels because they are white noise: they don't communicate anything about degrees of danger or probabilities. But if people in those other states see such a warning, many of them might get nervous.

There does seem to be a simple solution: add a Proposition 65 warning label only for shipments to California. Why doesn't the company do it? I don't know. It's possible that the California market is much smaller than 15% of the market and that it just isn't worth it.

The point about warnings as white noise does, though, raise a more-serious issue. Within a few miles of where I live in coastal California is Monastery Beach, where the undertow is particularly severe. Many people have drowned at the beach. I remember one time in the last 10 years when a whole visiting family drowned.

Notice the word "visiting." Almost all the people who drown there are tourists. Why is that relevant?

The locals tend to know about the undertow. Outsiders do not. On the beach for well over 15 years has been a big sign warning of the undertow. I think many tourists simply think the sign is typical government overstatement. When I went through the San Jose airport Saturday morning in a long line at TSA, we passengers were subjected to John Pistole's warning, on an infinite loop, of the dangers of terrorism. We've all seen enough to know that it's not that dangerous. So we tend to ignore government warnings. So when there really is a high-probability threat and the government warns us, we tend to dismiss that too. Government cries wolf way too often.

It's a kind of a Gresham's law of warnings: warnings about low-probability threats drown out, rather than drive out, warnings about high-probability threats.

One last example. In 1982, when I was working in the Reagan administration, my friend Harry Watson came to town and we rented two kayaks. I had never been in a kayak in my life. We tried them out on the placid C&O canal beside the Potomac River and then went to put them in the Potomac. "WARNING: DANGEROUS CANOE PUT-IN." said the sign. "Yeah, right," we thought. There goes government crying wolf again.

Wrong. Within 50 yards of having put in our kayaks, we were using all our physical energy to navigate down a very rough river. Within less than 2 minutes, I was worn out and all I had left was adrenaline. After I got to my first bit of calm, I relaxed slightly and immediately tipped over. I was heading for the next big set of rapids. Fortunately, a seasoned kayaker appeared out of nowhere, told me to hold on to the strap on his kayak, and towed me to shore. I was lucky. Those people at Monastery Beach were not.

Good information is just too important for us to allow government to drive it out with bad information.

Comments and Sharing

COMMENTS (21 to date)
Paul Crowley writes:

Let's start calling it "warning pollution". You may think that the ridiculous, CYA warning notice you just stuck up doesn't do any real harm and saves you from possible trouble, but you're contributing to the ever-growing tide of warning pollution, a danger that kills many innocent people, such as those at Monastery Beach, every year.

Mark Brophy writes:

A few years ago I visited a volcano in Costa Rica where signs were placed warning visitors not to walk beyond a certain point. Some United Statesian nuns ignored the sign and failed to return, so their friends asked the Costa Ricans to save them. Unfortunately, the sign meant what it said; the Costa Ricans would not try to save the nuns because it was too dangerous.

Krishnan writes:

About "deficits" and "debt" and "entitlements" ... I wonder if many in the public are ignoring the dangers ahead because they imagine all these are "low probability threats"?? There is lot of commentary, OpEds about Social Security and Medicare and the coming increase in the number of retirees and the unsustainability of pyramid schemes - and yet there is simply no urgency (I sense) in trying to find a solution ...

(Unless the public/GOVERNMENT has concluded that there is indeed no solution and so party till it implodes?!!)

Art Carden writes:

I've noticed something similar with school buses, which now have all sorts of flashing lights and other gear on them. The "cry wolf" analogy is appropriate; I pay little attention to government warnings now for precisely the reason that they're so common as to be uninformative.

jsylvest writes:

I second adopting the term "warning pollution." It's both an accurate and psychologically potent label. And the people who are most responsible for propagating warning pollution are highly correlated with people who place a lot of importance on minimizing traditional pollution.

PS Just FYI it's the C&O Canal. The Baltimore & Ohio is a railroad famous from Monopoly. The canal you're thinking of is the Chesapeake & Ohio.

Thank you, David, for a valuable presentation.

To me your argument begs for the next step. That step is an explanation, targeted to voters in the mainstream, telling how better warnings might be provided by privately-regulated insurance contracts. But that is a big and difficult step to imagine. A reader would first have to un-learn most expectations about "insurance" as it exists (heavily regulated) in America.

Tom West writes:

I like the term "warning pollution", but I have to say we're going to need a pretty big social rewrite before we're ready to deliberately choose to avoid warning pollution.

Most of the warning pollution is about things that *have* killed or permanently injured people - just not a lot of them. Asking people to *not* post warnings is essentially deliberately choosing to sacrifice the effort to save a few people from a peril to make our efforts to save a lot of people more effective.

And society *really* sucks at deliberately and publicly making those trade-offs. (Of course we have to make those trade-offs all the time, but acknowledging that we're deliberately doing so makes you a monster.)

I don't see us saying "yes, that peril is avoidable, but we're not going to make any effort to protect people from it" any time soon.

And I *especially* don't see the legal system protecting people who make such a choice.

David R. Henderson writes:

@Paul Crowley,
"Warning pollution." I like it. It grabs one's attention and causes one to want to know more. Good on ya, mate.
@Mark Brophy,
Good story.
Good point. And this is right in line with my argument. The probability of a huge, huge problem with the U.S. federal government budget in the next 30 years is, I would estimate, over 50%. That qualifies as high probability. But it's possible that many people are dismissing it because they've heard so many warnings in the past about very low probability events.
Thanks. Correction made. Chesapeake, of course.
@Richard O. Hammer,
You're welcome.
@Tom West,
This answer is probably too brief--I'm up early in Hawaii to get some grading done before events start today--but I think there are some things that fall on one side of a bright line. Warnings on ladders, for example, that say that the ladder could tip over if you put it on a pile of manure, fall on that side. Warnings that you could hurt your hand if you put it where a lawn mower blade is rotating do also.

Paul writes:

In Yosemite, just above Vernal Falls, they have a sign saying "stay back from slippery rock at water's edge. if you go over the falls you will die." That's the only sign I've ever seen that is that direct. Normally they say something wishy-washy like "danger: slippery rock" or something more in the warning-pollution style

jason braswell writes:

I totally agree. My wife and I were at a hot springs resort in Japan a few years back. The facility and springs were right next to a big river whose banks had signs warning people not to get in because of the current. Knowing that Japan had much less "warning pollution", I heeded the signs, but I told my wife that if I saw that in the US, I wouldn't even think twice about jumping in.

JKB writes:

I see the "Warning: This product (or contains ingredients) is known to the state of California to cause cancer" all the time. Since this fact is only known to California, I've just come to accept the one shouldn't worry about knowledge from the land of fruits and nuts. Plus, I suspect it is California that causes cancer just as it is probably worrying about cancer that also causes cancer.

The licorice seller probably doesn't see the benefits of having packaging redesigned to include the warning just to be another licorice seller in CA. Or even paying to have stick on labels (assuming CA allows) place on packages.

Back during the dotcom boom, I knew of a lot of small software and other vendors who didn't bother with the hassle of bidding on federal procurement since they had plenty of business without the hassle. I suspect that changed after the bust.

But it is true, everything is subject to vague warning so there is little reason to pay attention. I remember in DC after the 9/11 attacks, everything was "report anything suspicious", listening to the radio one day, police were responding to a report of a suspicious green substance on a curb. I turned out to be guacamole.

Steve Z writes:

I propose that warnings should identify the base rate of the risk (where applicable), some demographic information, and the conditional probability of the risk if one engages in the activity. Warning pollution occurs because warnings are binary. But then, I live in a libertarian bubble where people intelligently process information about risk.

MingoV writes:
There does seem to be a simple solution: add a Proposition 65 warning label only for shipments to California.

Perhaps the licorice company president understands the prisoner's dilemma and the effectiveness of tit-for-tat responses. (You label our product carcinogenic; then you'll hear from annoyed citizens who can't buy our product.) Various gun companies recently acted similarly: you ban guns for regular citizens; we'll stop selling guns to your law enforcement agencies. In states that enacted strict gun control, gun and ammo manufacturers moved elsewhere. If more businesses behaved the same, then the rate of government growth and control might be reduced.

Lars P writes:

The problem for the licorice company might be the mere existence of packages with cancer warning on them. Consumers in other states will hear about it, and not react well.

If I was in charge of that beach warning sign, I would add information about how many people had died there.

Joe Cushing writes:

I am a maker and seller of table lamps and have an ebay store doing so. As a small vendor, I'm unable to know what all of the laws are in all states. I've considered making my lamps not available in California just to avoid any possible mix-ups with a government that has stepped on business at every turn. California has a special law for everything and they care nothing about what their fellow states are doing.

Back when I was a truck driver, I lost 1000s of dollars over the time due to the cost of dealing with California regulations--even though I have never been to California. I used to handle freight that was California bound and because of special laws about adjusting the weight distribution of a trailer in California, the loads would be overweight--not because they were too heavy but because California prohibits moving axles to balance loads. This would mean going back to shippers and having them unload and reload the entire trailer to balance them for California. This is as apposed to simply moving the trailer axle for other states.

I feel like manufacturers, trucking companies, and retailers should buycot California. That would force them to realize that they are a more fascist state than any of the other 50 fascist states in the Union. It would force them to reign it in.

Harold Cockerill writes:

The sign posters may or may not care about the people they are supposedly protecting from danger. I think the people they care about the most are on the jury in the wrongful death trial that may be convinced not enough was done to protect the public. Obviously when something bad happens to you it's someone else's fault. Thank God for lawyers.

Himanshu Sanguri writes:

All smoke, tobacco and liquor packs contains the fleshy caution signs. Who cares?
It has all become customary, it is not only wolf cry by government, but a gang of wolves crying consists of Human Rights, NGO's, Government bodies, regulatory authorities, social workers, public, consumer, supplier, producer etc.

Krishnan writes:

"We told you the sequester was dangerous - Look what it did to the Boston Marathon" (call me a cynic - but I am waiting to hear that from someone on the Obama Administration who, no doubt, is furious that all their "the world will end if the sequester is allowed to go through" did not come to pass - even as they seem to desperately try to make it so - deliberately. (Sheila Jackson-Lee does not count, every time she opens her mouth, it makes for a youtube highlight of inanities)

Larry writes:

My car features multiple warnings about its air bags. (The safety system is dangerous!) Nuff said.

Brady Hauth writes:

After seeing your post, I took a look at the Prop 65 list of chemicals.
I know a thing or two about molecular toxicology, and ... most of that stuff really is bad for you. This is not stuff you want in your food. I largely agree with your basic point, but this is a bad example.

Ed writes:

This is a perfect example of a journalist who obviously never worked in business. He stated: "There does seem to be a simple solution: add a Proposition 65 warning label only for shipments to California." Further he states: "It's possible that the California market is much smaller than 15% of the market and that it just isn't worth it."

The problem is not as simple as just changing the labels. It all the extra work that goes into managing it. You will need to buy and stock the new label; you will need to have a separate production run; you will have to have separate storage for the marked licorice; and you will have to make sure that one of the unmarked bags NEVER gets sent to California by mistake, exposing you to fines. All of this adds cost but not profits. You could add this cost to the sales price but that would make you uncompetitive to other brands.

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