The Problem with Regulation

I've come up with a little analogy to make it easier to understand the problem with regulation. A child may run quickly across dangerous rocks and the chances are good that he will fall and get seriously injured. Regulation comes along to save him, prohibiting him from running quickly across the rocks. This is the child who grows up believing he is invincible because he never had the guts to violate the rules which kept him safe. But there's always a crack, isn't there? SIVs? CDOs? Pick your random letters. What does the child do, but jump without a backup 'chute and without safety checking the one he plans to use? He has come to believe that since he is following the rules, he will be safe. Yes, I know there are rules about parachutes and airplanes, but do they apply to base jumping? He may land safely several times, and then one day, SPLAT.

What if he had broken his leg on those rocks? He could be crippled or have a nasty scar, a horrible limp, etc. But these are all better than being goo on the sidewalk. Additionally, his parents and loved ones can concentrate on teaching him and enjoying him rather than punishing him for running on the rocks. I tell my kids to be careful. I say to them "I don't think you worry enough about falling on those rocks and breaking your leg." Do I stop them? Depends on the rocks. And if I do stop them, it is not with threats and yelling. It is with distraction. I pick them up and carry them elsewhere and play there with them, the whole time expressing my worry that their injuries, should they fall on those dangerous rocks, would hurt me more than they hurt them. But that takes really dangerous rocks.

Doing good doesn't cost you

If you do something other people like, chances are they will reward you for it. If it's really a good thing you've done, the cost to you should be negative. In other words, when you do a really good thing, you'll profit from it. This is a basic principle of human cooperation and one that is widely misunderstood. Everything you do to make money is an investment of something - your time and effort and maybe even your money. When the results are worth more to you than what you've invested, that's called profit. Good results mean that people like what you did. See the correlation? Doing good creates profit. Profit indicates that you have done good.

Of course there are many exceptions to this general rule: You can steal your way into profits without doing any good whatsoever. You can also give up your last efforts to save someone else's life, and though you did plenty of good, you'll be dead. Unless your life was worth more than that of the person you saved. Hmm... Yeah, think about that for a minute. Anyway, these are exceptional cases. Let's look at some more commonplace "doing good" that doesn't profit the "do-gooder."

Charity is giving some of what you have to someone who hasn't got as much. When this does not end up profiting you (mind you, profits come in forms other than money, such as happiness, friendship, etc.), I would argue that you have NOT done good. Why should we consider it good to give something to someone who doesn't appreciate it enough to make you feel good about doing it? I don't think that's good at all. I think the receivers of charity who are unable or unwilling to show natural appreciation shouldn't get it. Does this cut churches out of charitable giving? Perhaps. Does it cut welfare out? Of course. Then how are the poor to survive? Why, by doing good, of course!

I'm a criminal!!

It figures that a company from the island that Great Britain used to exile its criminals would figure out how to make us all into criminals. Yes, Red Flex is an Australian company. This is no reflection on the people (other than Red Flex employees/criminals) of Australia. Turning otherwise decent citizens into criminals is the business of government and a sure way to make a buck in a world where people have been taught that they are incapable of self-discipline, mean, and stupid. Perhaps that's not our world, but as Adam Smith pointed out, taxation tends to make decent citizens into criminals too, and just about every country I can think of runs entirely on taxation. He did not point out that by claiming to spend the money on protecting people from nature and from each other, governments also encourage our own abilities to protect ourselves from nature and each other to atrophy. Do you lock your car and your doors at night?

I thought my beloved city of Riverside would have figured out that the red-light systems are causing more harm than good. In Fullerton, the Superior Court of California, Orange County deemed Fullerton's contract with another company to be illegal because it provides a financial incentive to the private company (NTS) to keep the number of citations high. According to theNewspaper.com, Riverside's contract with RedFlex contains a clause similar to the one that Fullerton had. So I went to trial. Here's the transcript:

Ok, right, they put on a criminal trial and there is no transcript. They also said that I couldn't have my trial unless I paid first. They also refused to let me have my trial in my own city as CVC 40502 says I can because "There's no traffic court in the county seat."

Don't wait til I'm sixty-four.

Kim (my lovely wife) pointed out to me today that I am rebellious sometimes to the detriment of those I love. I know it's true. Adam (a good old friend) once suggested that my problem was that I'd test, for example, the strength of a guitar by standing on the neck and the body to see how much weight it would support. I used to break the toys that Lee (my older brother) got because... I can't remember, but I like to imagine it was because I wanted to see how they work.

So a few days ago, Jessica (CAVA Teacher) sent Kim and me an email explaining that Anna (our 4th grade daughter) would have to take a state mandated writing test on March 3rd and that there would be no make up test. State mandated??!! So I wrote back:

Hi Jessica,

I have a burning curiosity to know what will happen to those 4th and 7th graders who do not make it to the test. Can you find out? I'm sure Anna will make it, but that doesn't stop my curiosity. In fact, it makes it stronger. Is that bad?

She wrote back:

You never cease to amaze me. Both Julia and yourself have a knack for research and poking for information.

I wrote back "I hope we inspire others!" but Kim pointed out the negative part of it. It's possible that Jessica could sense and get frustrated by my rebellious nature (which wouldn't be a problem) and retaliate for it (which would be). This is why I'm asking you not to wait. Although I have put effort into being more careful with my rebellion, there might still be holes in my strategy. I'm hoping there are enough people close enough to me to tell me when I need to tone it down.

In less than an hour, I'll be on Sue Vogan's radio show discussing the plight of a friend and fellow Litmocracy member Karim. As part of his job at the University of Peshawar in Pakistan, he was perusing some research by other students in the library. One thesis concluded that oxygen levels in a local river were so low that no fish could be living there, but there were fish. He decided to investigate the equipment used for some field measurements of dissolved oxygen because he didn't know the University had such field equipment. In fact, it didn't. This means the measurements were not taken in the field and explained the discrepancy.

He brought this to the attention of his superiors, such as Dr. Asif Khan, who promptly suspended Karim from his job for inefficiency and misconduct. Apparently, when you find an error in research published by your employer, you are supposed to ignore it. And you're wasting your time if you try instead to get it corrected. Karim also discovered that the student who wrote the paper was a student of the current acting director, Dr. Tahir Shah. These are people that received degrees from U.S. and U.K. universities. So what gives?

It seems to me that the incentive for the US universities is to have the story that they provide educated citizens to developing nations. Governments fund education so that they have a story - that they're helping educate leaders. If they turn out to be poor leaders, lucky for them, the people of the world aren't paying enough attention to blame the universities. More people need to understand the chain of incentives behind publicly funded endeavors such as higher eduation. Instead, citizens in both America and in Pakistan are paying taxes to support scholarships to make up for the poor leadership.

So I have a job for the universities: It's like the Olympics. Here you have several very good athletes competing for top honors. Originally, these honors were awarded to the fastest runners, the highest jumpers, and those who could throw the farthest. These are measurements based on science, not judgments that are open to the abuses of personal bias. The scientific measure of educational success is the success of the private companies that employ the graduates. Our educational and research organizations need to actively promote and publicize their relative value to the industries that hire their graduates or use their research findings. This completes the chain of incentives, and highlights who should be the true beneficiaries of higher education. Most private companies that hire graduates retrain them to fill in the holes left by their university education. The School of Hard Knocks is the most efficient school there is.