http://tertulia-moderna.blogspot.com/2010/12/government-regulated-energy-efficiency.html
The article here presents what appears to be evidence that federal regulations can directly lead to better products. Given as examples are the energy efficiencies for refrigerators and automobiles.
It goes on to quote Hayek, "Any attempt to control prices or quantities of particular commodities deprives competition of its power … [but] this is not necessarily true, however, of measures merely restricting the allowed methods of production, so long as these restriction affect all potential producers equally…. Though all such controls of the methods of production impose extra costs … they may be well worth while."
geniusiknowit:I understand how regulation can cause prices to go up. But is there evidence to support that this is what happened with refrigerators and cars as a result of these specific mandates? Or is this a case of, "Our theory says this is bad, but we have no proof of this to be the case here."
Based on this statement I'm not sure you have a thorough understanding of Austrian methodology. I'm sure others who have been around here far longer than I can quickly produce links to the best articles to explain it.
Anyway, there is nothing about the Austrian position that says all regulation must cause prices to increase. What it would say is that each additional cost to the producer (in this case, the additional cost of compliance) carries an opportunity cost. This may manifest as additional price to the consumer, or as fewer options on the product, or layoffs/wage cuts for producer-side labor efficiency increases, or buying cheaper materials from a Chinese supplier instead of the current American one, or a reduction in sales, or any number of other things. This opportunity cost will ripple outward in the market and change the overall conditions from what they otherwise would have been because it overrides the free consumer's pricing valuation of features.
So in effect the supporters of regulation are saying this: We know what is best and are going to use the state to enforce our preferences for this product's features.
"The article here presents what appears to be evidence that federal regulations can directly lead to better products. Given as examples are the energy efficiencies for refrigerators and automobiles."
"I did read the Tucker article. That's how I came across this other one.
This article shows what appears to be a causal relationship between specific regulatory acts and increased energy efficiency of two common products. Is the regulation not the cause of these improvements, or did these improvements in efficiency cost consumers in some other way (e.g. less safe products)?"
It came at the expense of something, there's no way to know what. On the free market people make the choices they make with an eye towards their means and the options available to them. If energy efficiency was truly their top priority, why wasn't anyone delivering on that issue? Either the manufacturers on the market were for some reason successfully conspiring to keep energy usage high, or no one really gave a damn enough for it to be such a high priority.
I'm mostly familiar with the Austrian argument, I think.
This isn't the "Austrian argument;" it's basic economic theory. You can't understand the implications of such a regulation without first understanding the concept of opportunity costs.
"If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion."
Esuric:This isn't the "Austrian argument;" it's basic economic theory. You can't understand the implications of such a regulation without first understanding the concept of opportunity costs.
That's what I meant in the other thread by saying that ignorance of how market pricing works poisons everything. People support some regulation for x, and then x goes up. Aha! Obviously regulation makes us better off. Just look at this statistic saying that x went up after the regulation was passed. Ergo regulation is good, it makes us richer. But they make no mention of the opportunity cost of creating all that extra x. As if it came out of a void and all we had to do was decide we wanted it enough.
It would be great to have some charts that show the opportunity costs incurred by these mandates.