frictional costs of laws

Topics: Regulation, AA
02 Sep 1994

From: ervan

Even if the various employment restrictions (e.g. quotas, ADA, etc.) were
philosophically sound, which tbey are not, or if even they achieved *their*
stated goals, which they will not, there is a substantial frictional cost to
be weighed against the putative benefit.

Just today in a software catalog I received in the mail there there was a
product for helping to write job descriptions. It is described as "Writes
legally-appropriate job descriptions in minutes...Plus, The Americans With
Disabilities Act-ready job descriptions you create with Descriptions Now!
can help you make fair employment decisions you can successfully defend in
court." That anyone would ever need to waste $45 on such a product is bad
enough, but of the course the real cost is much greater: it has become
legally impossible to place meaningful job ads to get the people you need.
People searching for jobs are incumbered from finding a good job. Many
employment ads that would have been placed are just simply avoided. Many
people are hired to positions for which their labor is inefficiently applied
just as a pre-emptive legal defense. And, of course, the most substantial,
and obvious, cost is the amount of money wasted on litigation arguing over
which page of law out of thousands was not followed closely enough to give
someone their federally mandated handout.

I like the use of the word "fair" in the description too. Even the ad
surrenders to the thought police.

Similarly, the Trip Reduction Act took effect at Rice this fall. There are
too many things wrong with it to list here, but the main thrust is that Rice
has to get 1.47 riders per car that arrives between 6:30 and 10:00 AM. The
announcement of the official policy came from the person(s) whose job it was
to oversee this program on letterhead for the department responsible for
administering the program. What an incredible mess of micro-regulation and
bureaucracy for something that will, at best, produce a tiny effect (since
people living close can comply more easily but not save a significant amount
of gas), or more likely none at all as the lower price for gas (from less
commuting consumption, or so we are told) will result in higher consumption.
And, yes, I'm going to drive 200 miles this weekend to stare at some stars
while Rice saves 50 cents of gas.

In the Herman Brown building, where space is critically short, a good chunk
of the first floor has been taken over by the quota office (with a large
sign out front louding proclaiming that "equal opportunity" is the law).
This is particuarly silly at Rice where everybody has PC on the brain
anyway. I know the CS department tries to find black faculty and PhD
students. There aren't any (at least not after MIT & Stanford fill their

I don't intend to re-analyze everything wrong with 'affirmative action'
here, but only to make the point that all of these things could be done
without the frictional costs simply by resolving the matter with cash. The
gas one is the most obvious. Just raise the tax on gasoline. People can
still use it however they find most efficient. We now have short distance
commuters subsidizing long distance ones (yes, I said what I meant there),
commuters subsidizing pleasure driving, trucking, & lawn mowers. And,
everybody, is paying bureaucrats to shuffle paper. As for AA, the same
solution can work, just pay employers a 10% bonus (or whatever it takes) for
each black employee they hire. We can reach the desired level of employment
without everyone spending all of their time in court. Blacks can work where
they are more productive and more comfortable, instead of where the quota
needs to be filled. Well, you know the list. (The other advantage, in this
case, is that people will see how expensive this foolishness is and perhaps
be persuaded to desist. As it stands, the business employer minority is
being screwd by the rightous PC majority that does not know what it is doing).

A similar analysis applies to the ADA, get rid of the bureaucratic nonsense.
It's really a mess, just owning a building suddenly puts everyone in
jeopardy of being hit with a missing-ramp lawsuit. Give all of the money we
are spending on renovation to handicap people. Let them buy ramps wherever
they want (that is, let businesses install ramps where they want handicap
business which is now greater because of the subsidy money they have to
spend). If it is hopelessly expensive at my place, I can avoid the cost. At
other places, where it is cheaper, handicap people can pocket the change
left over after paying for the additional access. Well, the benefit of the
increased efficiency of this is obvious to everyone reading this without my
belaboring the details.

I suppose the deep question is: why does the government insist on doing it
exactly the wrong way? Let me offer several possibilities:
1) The systems argument - the internal dynamic of government is not
to produce (in the limited sense that it does anything), there is no
advantage in that, but rather the advantage is in expanding your own
influence. Thus, the evolution of the bureaucracy is that the 'winners' are
the departments that find reason to expand their jurisdictional control
(again, regardless of the motivation of the individual players).
2) The idiocy argument - this one is obvious.
3) Intentional exploitation - this is the deeply cynical explanation. The
purpose is not to lower pollution, or hire more blacks, or whatever, it is
to find excuses to take more or your freedom. The blackmail comes later
(for instance, small businesses were told they would never have to pay FICA
when the program began).