, the newsletter of the American Physical Society, the world’s second largest organization of physicists.

Physicist-turned-Congressman Rush Holt supports legislation banning conventional incandescent light bulbs (Back Page, August/September APS News). His statements about the legislation are misleading. Worse yet, his support of the ban embodies an elitism that supplants people’s right to choose with authoritarian dictates of a technocratic ruling class.

To the Wall Street Journal‘s claim that “Washington will effectively ban the sale of conventional incandescent light bulbs,” Holt glibly replies, “This was, of course, untrue. No type of light bulb was banned.” Sure, the legislation does not ban all incandescents, but it does ban conventional ones, as the Journal claims. The legislation will “make current 100-watt bulbs obsolete” and such bulbs will “disappear from store shelves,” reports the New York Times.

To justify the ban, Dr. Holt narrowly defines efficiency to mean only energy efficiency. But the most “efficient” light bulb best achieves the user’s purpose. Energy efficiency is important, but so are an appealing color spectrum, quickly reaching full brightness, low-cost dimming, and tolerance to vibration and heat.

The Congressman also decries proposals to repeal the bulb ban, as it could undermine Congress’s “tradition of supporting innovation.”  But when companies spend money to satisfy government demands, they invest less on innovation to satisfy perceived customer demand.

Businesses in relatively free markets innovate just fine. Consumer electronics is an obvious example, but product packaging has also become more efficient. Soda cans use less metal, while bottled beverage manufacturers advertise bottles using less plastic or petroleum-free plant-based plastics.

Meanwhile, the bulb ban exemplifies “innovative” ways for bulb makers to increase profits through political pull. Conventional bulbs are a “ubiquitous commodity” with a “negligible” profit margin, the New York Times magazine recently noted.  “No amount of subsidy or ‘green’ branding has managed to woo consumers away from Edison’s bulb.” So the lighting industry endorsed new efficiency standards that force consumers to buy more expensive products.

“We are taking away a choice that continues to let people waste their own money,” quipped Energy Secretary Steven Chu, a Nobel laureate in physics. Even if this is true, wasting one’s own money is every person’s right. Moreover, if a consumer has good reasons to prefer conventional incandescent bulbs, buying them is not wasteful. What’s wasteful is being forced to buy less desirable alternatives.

A physics PhD and a high-profile government job is not a moral sanction to violate consumers’ right to choose.

1. In 1802, Why did the owners of newly built water-powered textile plants that support child labor laws in England?
2. Why did “American Telephone and Telegraph Company chairman Theodore Vail successfully called for federal regulation of long-distance telephone”?
3. Who benefited when the Magna Carta specified a “standard width for all cloth sold in the kingdom”?
4. “In hearings before passage of the 1972 federal Water Pollution Control Act, industrialists located along the Ohio River argued for the law.” Why?
5. Why did “the coal interests in Ohio and West Virginia … [lobby] for the 1990 Clean Air Act amendments requiring scrubbers on newly built and modified coal-fired electric utilities.”?
6. Why did John Deere petition the Environmental Protection Agency to increase pollution controls on small gasoline engines?
7. Why did Chicago meat packers lobby Congress to pass the 1906 Meat Inspection Act?

And today, why do certain power companies favor legislation like cap & trade & pollution controls?

The answer to all of these questions is that companies support political controls (regulations) that shield them from competition. Often the legislation is defended on moral grounds, like protecting children or the environment (whether it does or not), but the large drive is rent-seeking – to gain unfair advantage over others, or to to mooch off of them.  The classic example is alcohol prohibition, supported by both bootleggers and Baptists.  “Bootleggers and Baptists” now refers to the concurrence of unsavory business interests and (often questionable) ethical crusading for political controls.

Read the whole article in The Freeman: We Want to be Regulated.

The Environmental Protection Agency’s “Rulemaking Matters!” contest invites filmmakers to submit short videos that explain how federal regulations touch our lives. The best video wins $2,500!  Presenting a reason.tv submission: “Rulemaking Matters!”

The EPA webpage for the contest is here.  Check out Reason.tv’s other two entries for the “Rulemaking Matters!” contest.

Also check out this entry from the Competitive Enterprise Insitute, A Day in the Life of the Regulatory State:

Since Coloradans have varying preferences for air quality and how much they’d pay to improve it, legislating a one-size-fits-all solution is not the best policy. As summarized in the book Free Market Environmentalism, courts heard common law nuisance cases concerning air pollution for years before the Clean Air Act. Polluters would compensate plaintiffs for demonstrated damages. Threats of costly lawsuits would encourage companies to reduce emissions.

If governments must legislate pollutants levels, they should let polluters find the most cost-effective ways to meet requirements. Otherwise, politicians will dictate political solutions that benefit their careers and favored lobbies at taxpayers’ expense.

House Bill 1365 smells like a political solution. It would require electric utilities using coal-fired power plants to submit “emission reduction plans.” The plan must give “primary consideration to replacing or repowering coal-fired electric generators with natural gas and to also consider other low-emitting resources.”

Indeed, politicians have subsidized the coal industry. But this does not justify subsidies or favors for their competitors. Instead, removing existing subsidies and let energy producers compete on their own merits.

This commentary was published in the Daily Camera (Boulder) on April 10, 2010.

The link to the Free Market Environmentalism book is to Google Books.  Most of the chapters are there, but the one on pollution , Chapter 10, is not.  Relevant references in the chapter include: Bruce Yandle, Bootleggers, Baptists, and Global Warming.  Check out his author page at the Property and Environment Research Center for more articles on common law and environmental issues. Also check out Indur Goklany’s work on air pollution and the Clean Air Act.

New York’s 1895 Bakeshop Act … banned bakery employees from working more than 10 hours per day or 60 hours per week. In its 5-4 decision [Lochner v. New York (1905)], the Court nullified this provision for violating the liberty of contract secured by the Due Process Clause of the 14th Amendment. …

George Mason University legal scholar David Bernstein has thoroughly documented, the mainstream version of the Lochner story, which pits evil bosses against viciously exploited workers, bears zero resemblance to the historical evidence. The real origins of the Bakeshop Act lie in an economic conflict between unionized New York bakers, who labored in large shops, and their non-unionized, mostly immigrant competitors, who tended to work longer hours in small, old-fashioned bakeries. As Bernstein observed, “a ten-hour day law would not only aid those unionized workers who had not successfully demanded that their hours be reduced, but would also help reduce competition from nonunionized workers.”

To put it another way, Lochner v. New York secured a fundamental right against arbitrary government interference while undercutting an act of naked economic protectionism.

This is an example of what economist Bruce Yandle calls “Bootleggers and Baptists”:

Here is the essence of the theory: durable social regulation evolves when it is demanded by both of two distinctly different groups. “Baptists” point to the moral high ground and give vital and vocal endorsement of laudable public benefits promised by a desired regulation. Baptists flourish when their moral message forms a visible foundation for political action. “Bootleggers” are much less visible but no less vital. Bootleggers, who expect to profit from the very regulatory restrictions desired by Baptists, grease the political machinery with some of their expected proceeds. They are simply in it for the money.

Examples I can think of include:

• How Mattel benefits from new requirements for testing toys.  It gives them a competitive advantage over small toy manufacturers.
• Judge Jim Gray on The Six Groups Who Benefit From Drug Prohibition (Reason.tv video): drug lords, juvenile gangs, law enforcement, tough-talking politicians, prison industry, terrorist organizations.
• Anti-trust laws to squash competition. See Antitrust Policy: the case for repeal, by Dominick T. Armentano. For example, page 10 of Armentano’s book on Google and his 2009 op-ed in the Christian Science Monitor.
• Medical licensing.

Paul Krugman seems never to take account of the findings of public choice. Even a basic understanding of public choice would make him question his views about how effective government can be in achieving good things. This comes across clearly to those who, as I do, read over 30 percent of his columns in the New York Times. He seems to believe that if one can conceive of a government solution to a problem, then all that has to happen is that the legislative bodies pass a law to spend money on the problem and the problem will be fixed.

Read the whole post here.  Henderson is the editor or the Concise Encyclopedia of Economics, available on-line here.

Speaking of public choice, here’s a succinct summary from a Medicare reform report:

Like for-profit firms, politicians must compete to survive. But the nature of that competition forces them to weigh political costs against political benefits – where “costs” and “benefits” are measured in terms of impact on the next election. Private firms competing in a marketplace, by contrast, must compare economic costs with economic benefits.

For more, see here.

GREENSBURG, Indiana (Reuters) – The rest of the country may have been debating the possible bankruptcy of America’s iconic automakers on Monday, but in southeast Indiana more than 1,000 U.S. workers were cheering the opening of Honda’s newest assembly plant. …

The rise of Honda’s mammoth new car plant in America’s farming heartland is a stark contrast to the layoffs and plant closings announced in recent months by General Motors Corp, Ford Motor Co and Chrysler LLC.

But for the Honda workers here, their jobs — with a starting wage of $18.41 an hour — are just as much part of the U.S. auto industry as those at their imperiled Detroit competitors. They just don’t get as noticed.

“GM has laid off and cut back how many people and Honda is building a plant. What is Honda doing right? Maybe they should look at this model and learn something instead of getting a bailout,” shrugged new Honda worker Larry Giles, 41.

According to 2007 figures compiled by the Center for Automotive Research, foreign automakers including Honda, Toyota and Nissan employed some 113,000 workers in the United States, about half of the 239,000 employed by Detroit’s Big Three.

Read the whole article here.

Why would politicians bail them out?  Diffuse costs and concentrated benefits.