The death of HR 2749? The Limitations of Policy.

As I wrote the first draft of this it looked as if  the House of Representatives had voted down a sweeping food safety bill, HR 2749. With a few new maneuvers, it looks like it may not be dead yet. If it stays dead, this non-event is perhaps one of the best things to happen to agriculture this year. I say this not because I am a fan of unsafe food. But this bill would have placed the same level of documentary requirements on food producers of all levels, regardless of the systemic risk posed by their operation. It as if the corner bike shop in your town had to meet the same regulatory requirements as General Motors. Despite a flurry of proposed amendments, some of them potentially big improvements, the bill died as it should have. It died because even legislators under pressure to do something about food safety recognized that this wasn’t the answer. It would have added huge costs and administrative burdens to the part of the food system not having any problems, without providing resources to do anything about the corners of the system where problems are known to linger. Why can’t we find a policy solution to a complex problem as important as food safety?

Sadly some of the trouble is with policy tools themselves. No matter how hard we try or how complex we make them, policies have a great deal of trouble with complexity. Policy handles course-grained issues well. More calories, less cost? Easy. All food must be organic? No problem. Everything must be from within 100 miles? Piece of cake, legislatively speaking. Policies and regulations are great at prohibiting certain actions or practices. Pass the law and it is so. (Implementation is another matter, of course.)

But does this produce the result we are looking for? Does it produce a food system with a wide variety of healthy food options for people of all incomes, successful farmers, happily fulfilled farmworkers, ethically treated animals, clean streams, thriving local businesses, empowered cook-at-home consumers, equitable taxes, delighted gourmets, abundant wildlife, pristine views, smart urban growth and development….

Sorry, kind of dozed off there for a second without finishing that sentence. But the point is that the preceding sentence can never be finished. Why? Because we want it all. And that’s the problem. We have never had it all, either through policy and regulation, free market capitalism, feudalism, monarchies, hunter-gatherer clans or any other form of human enterprise.

Does this mean we shouldn’t have policies or regulations? Of course not. But I’m skeptical that we will ever develop the perfect policy that delivers the perfect outcome. And if you look at the most dysfunctional aspects of our society, is it any surprise that they have the most regulation attached to them? To look at examples beyond food and agriculture, how good of a job does the Pentagon’s mountains of procurement policies do at ensuring our defense dollars are well spent? Does our tax code do what we want it to do? Pick a handful of state and local rules that impact you directly. How do they measure up?

My point is that no matter how much we complicate our policy, it can never  fully embrace the continually changing complexity of reality. What we are left with is an increasingly burdensome legacy that creates a lot of work for accountants, attorneys, consultants and bureaucrats. What happens when  the number of people regulating an activity approaches the number of people performing the activity? I’m not sure what would happen at a basketball game with 10 officials on the court.

I offer no solution, merely a recommendation for mitigation. Let’s look at paring down our libraries of statutes. Let’s consider that maybe some of the regulatory medicine is worse than the disease.  Didn’t we try deregulation in the financial markets, you ask? We did, and you are correct… it didn’t turn out well. But what really happened? A few outright frauds like Bernie Madoff are headed to jail. A few poorly managed companies no longer exist. Unreasonably inflated asset values returned to more rational levels, painful though the process was. I’m not trying to be cavalier about this… I know people got hurt. It turns out we did strip out a few important regulatory safeguards, but because of the complexity of the whole system, no-one recognized them as such. A simpler regulatory scheme would have been better. Enough capital reserves? Prudent risk assessment? Reasonable use of leveraged capital? A simple set of rules is superior to one that is too complex for anyone, even the experts, to follow.

Phrased another way, if Moses had brought down the 27,896 commandments from Mt. Sinai, would the whole Judeo-Christian thing have caught on? I think not.

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