[In the 1980's]For egg farmers, however, the problem was not so easily dismissed. Faced with bad publicity and multimillion-dollar liability claims, they voluntarily began testing for the bacteria, disinfecting henhouses, refrigerating eggs, removing manure and controlling rodents. But those farmers soon came to think that they were at an economic disadvantage against competitors who weren't spending money on prevention....
The fact that the egg industry was on board [with draft regulations] didn't sway Dudley [GWB's person for regulations in OMB]. "One needs to be skeptical when an industry seeks regulation, because it often confers competitive advantage. It could be over other companies or over international firms," she said. "And it often raises costs and it's consumers who get hurt."Basic fairness says everyone in a market should be competing on an equal basis. The government should set the rules and let the competitors fight it out. Of course, that raises the issue of who is in the market? Should someone with a thousand hens be considered a competitor the same as someone with a million hens? How about the person with 20 hens who supplies neighbors? I think that's basically what Dudley gets at when she speaks of "an industry". She's really talking about the big boys in an area who have the bucks to come to DC and hire lobbyists, etc. The economics of regulation sometimes, not always, create additional costs; costs which if you're big can be spread over many units of production but if you're small can be make or break. (I'm thinking of shifting from milk cans to a bulk tank, which was a hot issue for dairies when I was 20 or so.)
So the tradeoff can be: draw the line in one place and you allow free-riders; draw the line in another place and you encourage concentration and kill the small producers.
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