The Importance of Economic Liberty 33:27

Baetjer illustrates the harmful effects of economic regulations and argues that we ought to instead prefer economic liberty.

Transcript

Howard Baetjer: All right ladies and gentleman. In this lecture we’re going to get to the second of what I see as the two crucial institutions of a free economy and a free society, and that is freedom of exchange. We’ll contrast it with at least ostensibly well-meaning restriction of exchange, restriction of voluntary exchange [00:00:30] by government. Again, the argument I’m making I want you to consider is that the incentives for people to pay careful attention to the well-being of others are much stronger where we have freedom of exchange than where the government can interfere with voluntary exchange.

I’ll get at this initially with a story. The story comes up in a moment. First of all, just to frame it a little bit. How many [00:01:00] of you believe in freedom of contract? That is, how many of you believe that competent adults should be free to make whatever contracts they wish with others. You, like most of my audiences, raise your hand, say yes you do, when you’re asked that question in the abstract. But I like to point out to my audiences that in fact there are many interferences with contract that they believe in very much.

For example, do you believe in the freedom of contract to work at whatever [00:01:30] wages and hours one wishes? Many will say no. They believe we should have minimum wages. We should have maximum hours laws. How about workplace safety rules? Should people be allowed to make contracts to work in unsafe factories? Many would say no. How about the selling of stocks, and bonds, and derivatives? Should people be free to handle those contracts that they want without full disclosure, such as the Securities and Exchange Commission requires?
[00:02:00] How about the practice of medicine? Should people be free to contract with whomever they wish to set their broken arm or prescribe medicines for them? Do we believe that lawyers should be unregulated- I shouldn’t say unregulated. 

That lawyers should be unregulated by government? That people should be free to hire whomever they wish to write up a will or a contract for them? Should we be free to hire whomever we want to do electrician’s [00:02:30] work? Or, as I think many people believe, should that freedom of exchange be limited so that only competent electricians are allowed to practice, and so on? These are the kinds of questions that I’d like you to consider.

And I want to consider the idea that in all these cases, because of the incentives that are in play, we’re going to better off with allowing freedom of voluntary association, freedom of voluntary exchange. [00:03:00] Because the incentives there, even though there will be problems, because incompetence will practice, and people will distort the truth for one another, even despite that, the incentives in freedom of exchange, in that institution of freedom of exchange are very strong for people to pay attention to other’s well-being. And by contrast, when we allow governmental interference with voluntary exchange, even [00:03:30] for good reasons, that interference tends to be abused. People tend to take advantage of the governmental power to interfere and use it to their own advantage at other’s expense. So that on the whole, we’d be better off allowing full freedom of exchange between competent adults.

I’d like to get at that with a story that illustrates some of the problems of interference [00:04:00] with freedom of exchange, and this comes from the area of hairdresser licensing. This is the area that I choose, because just by chance, I was told a really interesting story by an eighth grader about hairdresser licensing, which I then wrote up in one of my first articles published in a national publication. Here’s the situation; I was new to this philosophy and its economics. I’d been invited to speak to an economics class at a local school, and while [00:04:30] I was there the teacher said, “Would you want to speak some other classes?” I said, “Sure.”

I was in an eighth grade history class. This was at an all-girls school in suburban Baltimore. I was describing some of what my profession Walter Williams says in his wonderful book The State Against Blacks about how occupational licensing laws get rigged against competitors. Especially competitors who don’t have the educational advantages. As I was describing [00:05:00] this a very thoughtful looking black girl in the second row, with a little smile playing about her face, raised her hand and she said, “Something like that happened to me.” I said, “Well, tell me. What was it?” She said, “Well, one of the five year olds in my community, in my neighborhood was going to have a birthday party. All the little girls wanted to get their hair done for the birthday party, and some of them wanted their hair done in gold braid, and I’m good at that so I agreed to do it for them.”

As I understand it, gold [00:05:30] braid was popular at the time. This was the 80’s I think. It was braids close to the scalp and gold thread woven in amongst the braids in decorative patterns. Cherissa was good at it. So she charged $5 a pop. Keep that number in mind. She charged $5 a pop, and the little five year olds came to her house and she did their hair. She said she had an outfit she wanted to buy, and so she wanted to make some extra money, and she agreed to do it. Cherissa was happy because she had the [00:06:00] income, and the little girls were happy because they had their hair done. It seemed for a while that everyone was happy.

Until, one of these five year olds, before the party, was stopped by a community member who said, “Who did your hair for you?”

Cherissa said the little girl’s name was Devon. Devon says, “Rissy did it.” That night, Rissy’s mother, Cherissa’s mother got a phone call from a neighbor saying, “I understand that Cherissa is doing the little girl’s hair for pay. She should realize that she’s not a licensed [00:06:30] hair dresser, and so what she’d doing is illegal, and if she keeps it up she’s going to get in trouble.” I looked at Cherissa, I said, “Well what did you do?” She said basically, “What do you think I did? My mother said we can’t have this. We’re not going to get in trouble. You cancel the other appointments”, and she said that was the end of it. She said, “But I did learn that that women who stopped Devon and said who did your hair for you, was the mother of a licensed hair dresser who had had a $32 hair appointment canceled by the mother of one of the five [00:07:00] year olds.”

What is the ostensible purpose of hairdresser licensing? Officially, what’s supposed to be the purpose of hairdresser licensing?

Student: Safety.

Student: Public Health.

Howard Baetjer: To protect the public health and safety.

Student: Fewer scissor deaths.

Howard Baetjer: Pardon me?

Student: Fewer scissor deaths.

Howard Baetjer: Few scissor deaths. Yes. Pieces of your ear cut off, [00:07:30] or your scalp burned by dyes and so on. Yes. That’s the ostensible official purpose. Based on Cherissa’s story, what is the actual purpose of hairdresser licensing?

Student: To form a cartel.

Student: Raise the income.

Howard Baetjer: To form a cartel?

Student: Raise the income of the hairdressers.

Howard Baetjer: Raise the income of which hairdressers?

Student: The ones who are licensed.

Student: Licensed.

Howard Baetjer: The established licensed hairdressers. It’s to cut out competition. That little story indicates the danger of even well-meaning government intervention for the best purposes. [00:08:00] That intervention can get taken hold of by special interest groups and used in ways that are not for the public interest, but against the public interest. A little bit more detail on this, I was fascinated by what Cherissa had said so I did some research. I went down to the Baltimore Board of Cosmetology and asked for a copy of the test, because I wanted to see if what Walter Williams said was true, that the test was rigged against poorly educated [00:08:30] people, because the practical part of the test, they could get through, but they couldn’t get through the written part, because the written part was too difficult.

Well, of course they looked at me like I was nuts. They weren’t going to show me the test. Then I realized that was sort of a stupid request. But I said, “Well could I see the regulations?” They said, “Yes sir”, and gave me a 56 page booklet of regulations about who could do hair under what conditions in Maryland. In that 56 page booklet there were four pages that had anything to do with health and safety regulation, [00:09:00] as far as I could see. That was in two virtually identical passages. One for the beauty salons, and one for the beauty schools. The provisions in there, and I was not cherry picking here, the provisions in there meant to protect the public health and safety were as follows. I’m quoting here.

“Salon employees must wear clean clothes, wash their hands, and keep their …” — I’m quoting now — “Keep their hair curling irons ‘free from rust, grease, and dirt’.” I [00:09:30] read that and I thought, is it necessary to write that down, that curling irons should be free from rust, grease, and dirt? Should the public thank the regulators for putting that in there, because otherwise they’d be going to beauty salons with rusty, greasy, dirty curling irons? It didn’t really seem plausible to me. Here’s another one quoting further. “A minimum of 12 combs and 4 brushes shall be available for each on premises employee licensed to perform beauty culture.” This is my favorite. Listen carefully. “Implements to be [00:10:00] used for pressing and thermal waving shall be adequate in quantity and variety to perform the complete service.” “Implements to be used for pressing and thermal waving shall be adequate in quantity and variety to perform the complete service.”

What I make of that is that you need to have enough to do the whole head, so that women don’t walk out of the salon with only half of their hair done. Doesn’t seem to be a very necessary requirement [00:10:30] to me. Guys, I’m not cherry picking. These are all the ones that had fundamentally to do with health and safety. So what was in the other 54 pages?

Sorry, 52 pages of that booklet? If it wasn’t about health and safety, what was it about?

Student: Certain skills the hairdresser had to have? No.

Howard Baetjer: Not skills.

Student: Qualifications?

Howard Baetjer: Qualifications. It was about who was allowed to practice. There were various limitations such as limitations on age, [00:11:00] and that sort of thing. Here, just a couple of them. There was a 17 year age limit. “No one was allowed to take the examination until having already put in 1,500 hours of training, or serving as an apprentice in an approved beauty shop for at least two years, full-time.” All these little qualifications, which appear to be right along the lines of what the economists who’ve studied this have said, these regulations get captured by the regulated group [00:11:30] and used to exclude competition. You’re with me? Okay. That’s the term you want to remember is the capture theory of regulation.

The idea that an experts in a particular field are the ones that the legislatures go to in order to pass the proper regulations.

After all, what are the right regulations for electricians, or for hair dressers, or for plumbers, and so on? Who’s going to know? Why, the electricians, the hair dressers, and the plumbers. So, [00:12:00] in the drafting of the legislation, they influence the in their favor to cut out the competition.

Is it a little bit facile for me to suggest that we shouldn’t have hair dresser regulation? I want you to consider that for a moment, because in the absence of government regulation of hair dressing, would there be no regulation at all? Or would the market process, would market forces regulate in some way? If [00:12:30] hair dressing licensing laws were sunsetted in your state, wherever it was, would you be worried when you then went to get a haircut?

Student: No.

Howard Baetjer: If not, why not? Take a moment and think about that. We’ll do this just briefly, because then we’ll get to a harder case. What are the kinds of forces, the kinds of incentives in the market process that would lead to public health and safety in hair dressing?

Student: Well, we’re talking about getting rid of hair dresser regulations, but not about getting rid of tort [00:13:00] law. So if someone burns me or cuts my ear of then I can sue them.

Howard Baetjer: Good for you.

Student: I mean, presuming the lawyer doesn’t cost and exorbitant fee. But we should get rid of that lawyer regulation as well, so then everyone can sue over bad haircuts.

Howard Baetjer: Well yes, to be consistent, there should be freedom of exchange in the law also, so we’d get rid, simultaneously, of hairdresser licensing and lawyer licensing. That’s worth considering. So, tort law, yes. There would be that fundamental institution of a free society. If you harm someone, you must make him whole.

Student: [00:13:30] I mean, even if we go outside the legal system, if I walk into a place and see greasy, rusty, dirty curling irons, I will say, “I will get my hair curled somewhere else. Thanks”, and walk out. Or if my friend says, “oh, I wouldn’t go to that pace. They’ve had like 30 scissor deaths this year”, I also wouldn’t go there, and then-

Howard Baetjer: So, word of mouth is a very important regulating factor.

Student: But then the companies know, okay, to get me in the door we need to have clean [00:14:00] curling irons and not kill people with scissors, and they’ll compete to make sure that their stores are safe.

Howard Baetjer: Sure. So companies have an incentive to provide good quality in order to get repeat business. Yes?

Student: I was just going to say that the internet has forever changed competition.

Howard Baetjer: Good for you. Right.

Student: When I want to eat somewhere, or for instance, if I’m going to take an Uber driver, or pick an Airbnb, I do it often based on rating and comments. So that’s a system which almost regulates itself. If you have bad comments, or bad [00:14:30] ratings, they won’t even walk in the door.

Howard Baetjer: I think you’ve made a profound comment. I’ve written a couple of blog posts and an article on that. The development of this rapid feedback through the internet, I think, has made a lot of regulation just completely obsolete, and the public service commission could just go away now that we have the real time two-way rating of drivers and riders.

Nothing more is really needed, I think, to regulate that. [00:15:00] We could debate that. But let’s stick with hairdresser licensing. Other things that would give your confidence that you get a good haircut. Who else has an incentive? You mentioned the salons have an incentive to establish a good reputation. Who else has an incentive to establish a reputation?

Student: The hairdressers themselves.

Howard Baetjer: The hairdressers themselves, and how might they do that?

Student: If we’re worried about hairdressers having good credentials for some reason, they could note [00:15:30] those on their application.

Howard Baetjer: Sure. Go to beauty schools. Beauty schools have an incentive, that presumably with maybe a little bit less than 1,500 hours instruction, to give somebody a certification. We’ve got the ones I was thinking. It’s the salons who provide information, beauty schools provide the certification, information vendors, such as on the internet that you’re talking about. One other kind of institution I would mention would be insurance companies. What role might they play?

Student: [00:16:00] They would diffuse the risk among lots of people.

Howard Baetjer: Yes, but I’m thinking of actually reducing the risk, reducing the harm. What I have in mind is that if you own a beauty salon and you apply for insurance, the insurance company is likely to ask you … Well, they don’t want to pay damages to people who’ve had these scissor problems. They might say, “Well, we’ll insure you as long as you give us some assurance of the quality [00:16:30] of your stylists and your barbers.” So there are those incentives in the market to keep up the quality of hairdressing. But hairdressing is too easy, because there’s too little at stake.

Let me ask you to do a similar kind of thought process with a much tougher issue. Here we’re very much focused on this question of if we had real freedom of exchange, which would mean regulation just by market forces, would that be adequate? [00:17:00] Let’s take what I think is probably the most emotionally worrisome for all of us, and that is pharmaceutical drugs. What I’d like you to do is to take a few minutes and think, suppose the FDA’s authority to forbid exchanges when — say a pharmaceutical company has a drug that it’s ready to put on the market — the FDA can say, “No, you may not put that on the market until we’ve put it through our tests.” If that ability to forbid [00:17:30] exchanges was eliminated and the pharmaceutical companies, and the doctors, or their hospitals, or their patients were free to buy and use the drugs, what assurances might we have? What forces would there be in the market that would tend to lead toward the public health and safety with the respect to pharmaceuticals?

Or would it be horrible and people would be getting poisoned and having horrible side effects all around? What are the things that come to mind? Again, take a moment and think, what are the various things that come to [00:18:00] mind that might provide good regulation from the incentives of the private sector?

Student: Aside from the ones we already mentioned for hair dressing, which I think play a big role-

Howard Baetjer: Well let’s review them then. Let’s review them. Tort law.

Student: Tort law.

Howard Baetjer: If a pharmaceutical company misrepresents or is negligent in their testing of a drug and someone is harmed, they can be sued. That’s going to be quite significant. Let’s attach [00:18:30] that to their insurance companies. Drug companies like to get insurance, right? What role do you think the insurance companies might play in this? Merck or Pfizer goes to them wanting insurance. What restrictions might the insurance companies put on them?

Student: They want to know what’s being cooked up in the lab, and whether it’s dangerous. What are we insuring?

Howard Baetjer: Whether it’s been property tested. What are we insuring? So the insurance companies would have a strong incentive to make sure that the pharmaceutical companies were putting [00:19:00] safe and effective drugs on the market.

Right? Good. Next. What else?

Student: Ones we’ve already done?

Howard Baetjer: Well, yeah. There’s word of mouth also. Interestingly, word of mouth among doctors is very, very significant. They write in the journals about the success of different procedures for treating people, the success or the difficulties they’ve had with things. That serves, in large measure, to regulate what drugs are prescribed. [00:19:30] Then you mentioned the internet and reputation. Certainly the drug companies care about their reputation. Go ahead. I’ve interrupted you twice already. Go ahead.

Student: I guess the difference between drugs and hair dressing is I can’t really tell at first sight whether or not a drug is safe or not.

Howard Baetjer: Good.

Student: So, I think an important knowledge surrogate that a lot of customers have, especially for over the counter drugs, is brands. Yesterday I walked into a store I had never been to before and picked a package of Tylenol up [00:20:00] off the shelves, and I didn’t take time to read the warning label, and I bought it without a second thought, because that brand and the reputation that they have served as a knowledge surrogate for me.

Howard Baetjer: Good for you. Are you guys too young to know the story of the Tylenol that was tampered with?

Student: Yeah.

Howard Baetjer: Before you were born? Some wacko injected cyanide into Tylenol tablets and people died. A couple, two, or three people died, I think. Is that right? Two [00:20:30] or people died. What do you suppose Johnson & Johnson, the maker of Tylenol did?

Student: They had to mobilize this huge public relations campaign to save their brand, and talk about how they were doing all these new safety.

Howard Baetjer: No. No, they didn’t really … As I understand it, as I remember it, they didn’t need any public relations campaign other than what they just did. They recalled every bottle of Tylenol in the world and threw it away, and then they didn’t issue anymore until they had invented, or had someone invent for them, and developed [00:21:00] the safety caps that we now see all the time. Before that there were no safety caps. After that the safety caps were ubiquitous. Johnson & Johnson took a terrible financial hit to save their reputation and ensure their customers of the quality of Tylenol, which is right down the lines of what you’re saying.

So, there’s reputation of the brand names. What else can we think of?

Student: You talk about brands, but there’s also certification.

Howard Baetjer: Good for you.

Student: Independent certification where not … [00:21:30] I mean, maybe you don’t trust a company to have like, “Well, we’re Pfizer and the Pfizer board of scientists say this drug works perfectly effectively and is completely safe.” That’s not especially trustworthy to have their own in-house people say it is.

Howard Baetjer: Sure. No. So they need independent third parties.

Student: They have independent, yeah.

Student: Something like Underwriters Laboratories.

Howard Baetjer: That’s where I wanted to go. Tell us what Underwriters Laboratory does.

Student: So, Underwriters Laboratory is an independent, essentially, certification agency that will look at any kind of electronics charge, [00:22:00] microwave you plug in, almost anything that goes into the wall these days.

Howard Baetjer: Insulation. Bullet proof vests. All kinds of … As of 2000, 14,000 different types of product.

Student: Wow.

Howard Baetjer: Underwrites Laboratory certifies. Now why would, in a setting of free exchange, why would a manufacture go to the extra expense of paying Underwriters Laboratory [00:22:30] — because that’s what they have to do, they go take their product and pay Underwriters Laboratory to test it for safety — why would they go to that extra expense if they can market their product without getting the certification?

Student: Well, a sort of naive answer might be the customers themselves would look at the seal and see if it is there or not. But just like with Underwriters Laboratory, most customers don’t even know what it is. But it’s the wholesalers and it’s the retailers who look at those things, and if they saw that it didn’t have that kind of certification, [00:23:00] they probably wouldn’t want to stock it.

Student: Hilton Hotels buys probably, literally hundreds of thousands of irons, and they won’t buy an iron unless it has that stamp on it, because their insurance company tells them if you don’t buy this and have a safe building then we won’t insure you. The whole chain of responsibility works really well.

Howard Baetjer: You all have done beautifully with this, better than I could. See if there’s anything on my list that I left out. Underwriters Laboratory, consumer reports, again, the use of the internet and insurance. [00:23:30] All right, good job. That …

Student: I would just say that this private system would … We were talking a lot about preventing bad products from getting to consumers, but I think that one thing that a private market does that a government regulation might not do as well is they would allow good things to go easier, whereas …

Howard Baetjer: I shouldn’t have been hired to give this lecture. We should have let this crowd do it. [00:24:00] You’re getting right to the point that I want to get to next, which is the comparison. Let’s compare the imagined regulation by market forces we’ve just been talking about with the facts of the regulation by the Food and Drug Administration. What are some of the down sides of that?

Student: I know Milton Friedman was famous for making this point. He says if you are at the desk of the FDA [00:24:30] and you’re deciding whether to approve or deny a drug, you know that if you approve a bad drug, your name and face is going to be on the front page of every newspaper in the world, saying this guy let Thalidomide through.

Howard Baetjer: Good for you. Let me just repeat that for emphasis to make sure everybody has said it. Those people in the Food and Drug Administration do not want to be guilty of letting a bad drug go through that causes birth defects or something else like that. They are very cautious [00:25:00] about that. Continue.

Student: But if I deny a good drug, not that many people, maybe a few doctors will know, and a few people with rare diseases will know, but ultimately there’s little cost to me. So, if I’m on the border about letting a drug through, I should always reject. It’s kind of a game theory thing. I should always reject a drug if I’m unsure.

Howard Baetjer: All right, that’s right. You’ve got it exactly right. The term is Type I and Type II error.

Student: Mm-hmm (affirmative)

Howard Baetjer: Type I error is to let a bad [00:25:30] drug through. Type II is to don’t let a good drug through. The point is that the personal consequences for the people in the FDA, and the institution of the FDA are quite severe. They have very bad consequences to let a bad drug go through, because there are congressional hearings, their face is on the front of the newspapers, and the victims are on the cover of US, and People magazine, and so on. There’s a big flap and a lot of bad consequences for the people in the FDA. [00:26:00] Therefore, they’re particularly careful, and there’s a great deal of research about this that you can see to back this up.

What is the consequence for the public health and safety of this excessive care, excessive carefulness we should say, on the part of the FDA. One consequence is what’s known as the drug lag. It takes a long time to get a new drug to market, because there’s so many tests to [00:26:30] go through. I recently heard an estimate about what it costs from beginning to end — from the beginning of the research to getting the drug on the market — in round numbers, what does it cost a drug company to get a drug on the market?

Student: I think it’s 70 billion dollars.

Howard Baetjer: I heard a billion.

Student: Oh, a billion?

Howard Baetjer: I think it’s a billion. But it was not in the millions, it got up to a billion. So, it’s very, very expensive. If it’s that expensive to get a drug to market, [00:27:00] how eager are drug companies going to be to produce drugs that address a very rare disease that only a few people get?

Student: Why bother?

Howard Baetjer: Why bother? They won’t be able to get paid the million dollars back by only a handful of patients. So there are fewer drugs brought to market, and they take a longer time to be brought to market. Now, what are the consequences for the public health of that?

Student: [crosstalk 00:27:29]

Student: Negative.

Student: [00:27:30] … people for their disease?

Howard Baetjer: This is grim, and this chart I’m about to show you comes from more than 10 years ago, but nothing has changed in the interim. Here are some examples of Type II error by the FDA. I’ll read it to you here. Thrombolytic therapy, which dissolves blood clots, was delayed for two years. An estimated 22,000 deaths resulted. The way this is calculated, I’m pretty [00:28:00] sure, is when the FDA does let a new drug go through, they say this is a good drug, it should save however many lives every year, and so on. So you take the number of lives they say it would save per year times the number of years they have delayed the drug, and you can come up with a number of the avoidable deaths that have occurred as a result.

Thrombolytic therapy delayed for two years, up to 22,000 deaths. Interleukin-2, which was available already in Europe, treats kidney [00:28:30] cancer; 3,500 deaths. Misoprostol prevents bleeding ulcers; about 8,000 to 15,000 deaths resulted. There are many other examples like this. This has led one economist to say that statistically, as he sees it, the number one killer in the United States every year is the FDA. It may be too strong, but it’s an interesting way to think about it.

The point I want to make is this — [00:29:00] of course, unless the listeners to this talk are very different from me — initially on thinking about the idea that the FDA should not be able to ban drugs from sale is a horrifying idea. It’s maybe more horrifying for me than for you all because the Thalidomide disaster, which resulted in deformed babies, occurred when

I was old enough to see the pictures in Life Magazine. So I’ve always been a proponent, until I really [00:29:30] studied it, of the FDA. The idea that the FDA should lose that authority is scary. That’s why I emphasize the damage that the FDA’s over conservatism can cause.

In no case are we going to get a perfect world with perfect results. Whether we really on regulation by market forces or regulation by the Food and Drug Administration, there will be problems. The question we need to ask ourselves is, [00:30:00] under which set of rules, which set of institutions, will the problems be lower, will be less? It looks to me pretty clearly, now that I’ve thought about it for a while, that given the incentives in the private sector, people would continue to be very careful. But we wouldn’t have the over caution from the FDA that results in so much unnecessary and avoidable death.

All right, I believe we have finished. Recapitulation. There are private sector alternatives [00:30:30] to government actions.

We’ve got the civil society versus political society, private ownership and freedom of exchange versus government ownership and restriction of exchange. The incentives in the civil society institutions are healthier. That’s the claim that I offer to you, and I’ll let it go at that, and take questions.

Student: Again, taking your point on regulation, what [00:31:00] do you think about the type of government programs that don’t give them the authority to bad something, but set certifications for what is an approved product you can label under certain designation? I’m thinking for example, things like a product that has a certain sort of designated location or origin.

Like authentic cheddar cheese from England where it has to be made in a certain area, [00:31:30] or wine in Italy and France where they have a government board that you don’t have to submit it to it, but you’re just not allowed to sell it under the name of whatever certification of quality, but it’s a government managed program. What do you think about those type of things?

Howard Baetjer: I think they’re much less problematic, but I still think they’re unnecessary and those restrictions about content, about how you market something should be handled in the civil law [00:32:00] with things like copyright and truth in advertising litigation, that sort of thing. I don’t see that it’s necessary for the government to do that. Not inherently objectionable, but again, there’s such a strong temptation. If it’s mandated that a company get the government’s approval to market its product as real feta cheese, say, then there’s a strong incentive for competitors [00:32:30] to go and lobby the government to get certain kinds of products labeled as imitation feta cheese, or imitation whiskey. There’s a true case from that where what everybody considers … What, there’s two kinds of whiskey?

Student: Like scotch.

Howard Baetjer: No, two processes. One is to put it in the barrels with the charcoal and another is …

Student: Bourbon, it’s like bourbon.

Howard Baetjer: I don’t even remember which maker it was, but they wanted to get the other one called [00:33:00] imitation whiskey. That process, I think, would be very much subject to capture, and that might be more problems for the customers than just letting people advertise as they see fit and pulling them into court if they seem to be advertising falsely.