Vox explains that if you watch tomorrow’s Super bowl you will likely be in the minority:
The Super Bowl is the most-watched show on TV, year in and year out. Nothing else can even come close. And if you look at the game’s viewership trends, it’s a pretty safe bet that each year’s Super Bowl will become the new most-watched program in American TV history.
Yet at the same time, the Super Bowl’s ratings have remained more or less consistent since the 1980s. Indeed, the highest-rated Super Bowl to date aired in 1982. Even as more and more people watch the big game, the percentage of Americans who tune in has stayed at roughly 45 percent.
This is all thanks to how Nielsen calculates its ratings, the growth of the US population, and the slow decline of just about all other television programming. Or, put another way, it might seem like everybody in the country watches the Super Bowl — but only a little under half of us do.
[t]he overall viewership numbers for the game have climbed, more or less nonstop, for the past 30 years. And yet the rating (again, the percentage of people watching the game) has remained fairly stable. For example, the highest-rated game of the past 30 years was in 1986—when approximately 48.3% of American TV viewers watched the Chicago Bears destroy the New England Patriots.
Much of the controversy surrounding the Ford Pinto (see the post below) focused on the infamous ‘Pinto Memo,’ a confidential cost-benefit calculation performed by Ford. Mother Jones magazine got hold of the memo and reported that Ford had used the calculations in the memo to justify not making safety improvements to the Pinto’s fuel tank. Specifically, the magazine reported that Ford assumed the cost of safety improvements to equal about $11 per vehicle. The company argued that this cost could not be justified because it would exceed the value of the lives lost in gas tank fires. Ford assumed the value of each life to equal $200,000.
Americans were outraged to find out that Ford had put a monetary value on human life. But before we address that point, it’s worth pointing out that Mother Jones got many of the specifics wrong.
The memo was not an internal Ford memo, but was prepared at the request of regulators at the National Highway Traffic Safety Administration (NHTSA).
Regulators requested the analysis contained in the memo because they were considering new regulations for the auto industry as a whole. The calculations applied not to Pintos specifically, but to vehicles in general. Ford therefore never used this particular memo to make design decisions regarding the Pinto.
The memo pertained to gas tank fires caused by roll-overs, not by rear-end collisions, which were the focus of the Pinto controversy.
But leaving all that aside, why would Ford be so crass as to put a monetary value on human life? Well, one answer is that the government told them to!
[H]ow can the value of those individuals’ lives be gauged? Can a dollars-and-cents figure be assigned to a human being? NHTSA thought so. In 1972, it estimated that society loses $200,725 every time a person is killed in an auto accident (adjusted for inflation, today’s figure would, of course, be considerably higher).
Here’s how NHTSA broke down the cost of a death from a vehicle fire.
We’ve seen some reports that, by the time of the ‘Pinto Memo,’ NHTSA was using a figure of $275,000, and that other federal agencies were using $350,000. So maybe Ford’s figure was a bit too low, but regardless, the principle remains the same: putting a price on human life. Is that the right thing to do?
Yes! The fact is that, as a practical matter, to treat each life as priceless would be far too costly. We would go broke trying to save lives in just one area (say, traffic safety) at the cost of lives in other areas (say, medical research).
Under the principle that life is priceless, we would have to approve an auto safety measure, regardless of cost, if it saved even one life. But if every car design had to include every safety feature that saved even one life, the cost of a car would become astronomical. A car that valued safety regardless of cost would look something like an M1-Abrams tank, or perhaps the fictional EM-50 ‘urban assault vehicle’ from the 1981 movie Stripes. The car might easily cost over a million dollars, and only rich people could afford to buy it. Moreover, almost nobody would want to pay so much just to be a bit more safe.
As an example, consider one safety measure: bulletproof glass. Very important people like the president ride in limos with bulletproof glass, but for ordinary people, the small increase in safety is not worth the cost. Sure, bulletproof glass could save a life here and there. Never know when you might get caught in crossfire while driving through a sketchy neighborhood. But nobody would want to pay for this small measure of additional safety. Nobody buys a Ford Focus and says, “I can’t believe those cheap bastards didn’t install bulletproof glass,” and then pays extra to have the bulletproof glass installed.
How can we tell if a safety device is worth installing, or like bulletproof glass, not worth it? The only way is to determine how many lives would be saved, maybe by doing crash tests, and then multiplying the number of lives by some finite value of each human life. That gives us the total safety benefit, which we must compare to the total cost. For the typical American, economists estimate that the appropriate value is no more than a few million dollars per life. It might sound crass, but it’s the rational way to proceed.
Economists accept that we must adopt a finite value for human life, and so does the government. As alluded to above, regulatory agencies assume a value of human life when determining the merits of new government regulations.
While the controversy behind the use of the value of human life in risk-benefit analysis still persists, it has become not only a common practice but an expected practice. In fact, most federal agencies actually require companies to carry out risk-benefit analysis using their predetermined values of human life. For instance, the Food and Drug Administration requires pharmaceutical companies to conduct risk-benefit analysis on the safety of their drugs; the Environmental Protection Agency requires chemical companies to conduct risk-benefit analysis on the extent of the effects of their air pollution.
When you put a price on human life, however, people freak out because they don’t understand the issue. Even so-smart (they think) Ivy Leaguers don’t get it. In the video below, the famous economist Milton Friedman gets challenged on the Pinto issue by an audience at Cornell University. The encounter occurred in 1978, at the height of the Pinto controversy. A key excerpt (at 1:55):
Friedman: Suppose it would have cost 200 million dollars. Per life saved. Should Ford still have spent that 200 million dollars?
Young questioner: You mean per…
Voice from the audience: That’s not the question!
Young questioner: That’s not really the question.
But that is, in fact, the question. On safety, you have to draw the line somewhere.
In the first chapter and episode of Free to Choose, Milton Friedman spotlighted Hong Kong as a prime example of a relatively free economy. In the second chapter and episode, Friedman discussed the baleful effects of economic planning and control in India. In the video below, John Stossel makes the contrast between Hong Kong and India explicit and direct. Whereas Friedman focused primarily on the freedom to engage in international trade, Stossel asks the simple but very revealing question: How easy is it to start a business?
This ABC special dates from 1999, and includes a cameo appearance by an 87-year-old Friedman. The show runs over 40 minutes, but the best and most relevant portion is Part One, which consists of just the first 16 and a half minutes.
This show makes the case for economic freedom more powerfully than almost anything else we have seen. Indeed, Part One is perhaps the greatest 16 1/2 minutes in the history of television. Or at least the most truth-packed. And the rest of the show is pretty great too, in particular the point near the end when Stossel tells the Calcutta politician to his face that his policies are “stupid.”
Update: Another highlight was when Stossel explained the difference between freedom and democracy. India has more democracy than Hong Kong, but Hong Kong has more freedom.
Those of us of a certain age remember the controversy of the late 1970s surrounding the Ford Pinto, a subcompact economy car. The Pinto was alleged to be a death trap due to a design flaw that would cause the gas tank to explode in the event of a rear-end collision. Everybody of a certain age is familiar with this story. But like a lot of things, what we think we know, isn’t so.
The attack on the Pinto started with an article in the leftist rag, Mother Jones.
The article claimed that Ford was aware of the design flaw, was unwilling to pay for a redesign, and decided it would be cheaper to pay off possible lawsuits. The magazine obtained a cost-benefit analysis that it incorrectly claimed Ford had used to compare the cost of repairs (Ford estimated the cost to be $11 per car) against the cost of settlements for deaths, injuries, and vehicle burnouts… The Mother Jones [article] claims of [sic] 500 to 900 burn victims due to the gas tank design. The actual number was found to be around 27 and it was not clear that number would have improved with the modifications Ford was alleged to have avoided.
As the great Robert Bork noted, “the left is not known for telling the truth.”
The truth about the Pinto was only much later revealed by a 1991 study in Rutgers Law Review by Gary Schwartz.
[T]he number who died in Pinto rear-impact fires was well below the hundreds cited in contemporary news reports and closer to the 27 recorded by a limited National Highway Traffic Safety Administration database. Given the Pinto’s production figures (over 3 million built), this was not substantially worse than typical for the time. Schwartz said that the car was no more fire-prone than other cars of the time, that its fatality rates were lower than comparably sized imported automobiles[.]
The flames of Pinto hysteria were further fanned by the 1978 decision of an out-of-control California jury to award $125 million–roughly half a billion relative to today’s incomes–in a wrongful death suit. A judge had to reduce the award to $3.5 million. This case incited a media frenzy about the dangers of incendiary Pintos, even though the autopsy concluded that the deaths occurred due to the crash impact and not the subsequent fire. Moreover, in this case, the deaths were not attributable to any sort of design flaw.
The supposed design flaw of the Pinto, according to Byron Bloch, was that in a heavy enough rear end accident, the front of the gas tank could come in contact with a bolt on the differential, rupturing it, and allowing fuel to spill out, with the potential for a fire. It is, however, extremely hard for the gas tank to come in contact with any bolts that might be able to accomplish this, unless the car is hit from behind at over 50 mph. And as was shown in the autopsy for the initial accident in ’78 that started this controversy, the occupants died from the impact, not from the fire (caused by an inattentive driver in a chevy van driving onto the shoulder and hitting their parked, but running Pinto from behind at over 50 mph).
ABC’s 20/20 decided to really heat things up in a 1978 broadcast containing “startling new developments.” ABC breathlessly reported that, not just Pintos, but fullsize Fords could blow up if hit from behind.
20/20 thereupon aired a video, shot by UCLA researchers, showing a Ford sedan getting rear-ended and bursting into flames. A couple of problems with that video:
One, it was shot 10 years earlier.
Two, the UCLA researchers had openly said in a published report that they intentionally rigged the vehicle with an explosive.
That’s because the test was to determine how a crash fire affected the car’s interior, not to show how easily Fords became fire balls. They said they had to use an accelerant because crash blazes on their own are so rare. They had tried to induce a vehicle fire in a crash without using an igniter, but failed.
ABC failed to mention any of that when correspondent Sylvia Chase reported on “Ford’s secret rear-end crash tests.”
As if to prove Mark Twain’s adage that “a lie gets halfway around the world before the truth gets its boots on,” the Pinto myth became inextricably implanted in the minds of Americans. The myth was so widely believed that even six years after the controversy ignited, David Zucker used it as the basis of a gag in his 1984 movie Top Secret!, a parody of WWII spy films. Funny gag, but based on a myth.
The false and misleading campaign against the Pinto reminds us of Ralph Nader’s famous but fallacious attack on the Chevrolet Corvair. The story is recounted by Milton and Rose Friedman in Free to Choose (p.192).
Ralph Nader’s attack on the Corvair, the most dramatic single episode in the campaign to discredit the products of private industry, exemplifies not only the effectiveness of that campaign but also how misleading it has been. Some ten years after Nader castigated the Corvair as unsafe at any speed, one of the agencies that was set up in response to the subsequent public outcry finally got around to testing the Corvair that started the whole thing. They spent a year and a half comparing the performance of the Corvair with the performance of other comparable vehicles, and they concluded, “The 1960-63 Corvair compared favorably with the other contemporary vehicles used in the tests.”
We’re no fans of the domestic auto industry, but like a lot of people, they have over the years been the victims of some pretty outrageous lies told by the political left and its media wing.
Without naming any names, we know some UD professors who welcomed Venezuela’s socialist revolution because they thought it would help the poor. What they didn’t understand is that the best system for eliminating poverty is free enterprise, not socialism. Now, after 17 years of socialism, the poor are not being helped by the fact that Venezuela stands “on the brink of a complete economic collapse.”
The only question now is whether Venezuela’s government or economy will completely collapse first.
The key word there is “completely.” Both are well into their death throes…Incumbents, after all, don’t tend to do too well when, according to the International Monetary Fund, their economy shrinks 10 percent one year, an additional 6 percent the next, and inflation explodes to 720 percent. It’s no wonder, then, that markets expect Venezuela to default on its debt in the very near future. The country is basically bankrupt.
That’s not an easy thing to do when you have the largest oil reserves in the world, but Venezuela has managed it. How? Well, a combination of bad luck and worse policies. The first step was when Hugo Chávez’s socialist government started spending more money on the poor, with everything from two-cent gasoline to free housing. Now, there’s nothing wrong with that — in fact, it’s a good idea in general — but only as long as you actually, well, have the money to spend. And by 2005 or so, Venezuela didn’t.
As Margaret Thatcher said long ago, “The problem with socialism is that you eventually run out of other people’s money.”
Even triple-digit oil prices, as Justin Fox points out, weren’t enough to keep Venezuela out of the red when it was spending more on its people but producing less crude. So it did what all poorly run states do when the money runs out: It printed some more. And by “some,” I mean a lot, a lot more. That, in turn, became more “a lots” than you can count once oil started collapsing in mid-2014. The result of all this money-printing, as you can see below, is that Venezuela’s currency has, by black market rates, lost 93 percent of its value in the past two years.
Now you might have noticed that I talked about Venezuela’s black market exchange rate. There’s a good reason for that. Venezuela’s government has tried to deny economic reality with price and currency controls. The idea was that it could stop inflation without having to stop printing money by telling businesses what they were allowed to charge, and then giving them dollars on cheap enough terms that they could actually afford to sell at those prices. The problem with that idea is that it’s not profitable for unsubsidized companies to stock their shelves, and not profitable enough for subsidized ones to do so either when they can just sell their dollars in the black market instead of using them to import things. That’s left Venezuela’s supermarkets without enough food, its breweries without enough hops to make beer, and its factories without enough pulp to produce toilet paper. The only thing Venezuela is well-supplied with are lines.
Socialism has failed everywhere it’s been tried. Venezuela is just the latest addition to a very long list.
And yet, on the eve of the Iowa caucuses, we have this:
Socialism at this point has become a kind of religion. Its supporters adhere to it on the basis of faith alone, impervious to fact or reason.
Hundreds of restless parents and kids rallied outside Nebraska’s state capitol last week to widen the options their state’s public school system. Nebraska is one of seven states with no charter schools, no vouchers, nor any other publicly funded alternatives—and it’s been this way for a while.
Our nation has a lot of problems, but perhaps the most unfathomable failure in the entire country is our inability to wrench education away from the failed and failing state educational monopoly. We know that the teachers’ unions that today control the government school system would not relish real educational competition. But, given that there is currently a lot of fashionable talk about “income inequality” maybe we can hope that the time may be ripe to focus on the role of our often dysfunctional government schools in widening the labor market skills gap.
Check out this risible piece of scaremongering which apparently aired on Good Morning America back in June, 2008. The video segment predicted that seven years later, in 2015, the world would see New York City under water, $9.15 for a gallon of gas, and $12.99 for a carton of milk. The reason? CLIMATE CHANGE, of course.
Lessee, the last time we bought gas we paid all of $1.44 per gallon. We’ll just go on record right now and predict that if, God forbid, we ever do see $9 gas and $13 milk, the cause will be Big Government, not the environment.
And make no mistake; the predictions in the video were not just an honest attempt at forecasting that failed to materialize. Even in 2008, such apocalyptic forecasts had no grounding in real science or economics. No, this is agitprop, pure and simple.
Usually, network television’s agitprop displays a bit more subtlety. But in this case they went pedal to the metal, probably because 2008 was an election year. Can’t wait to see what they cook up this year.
Thomas Jefferson said that the man who reads only newspapers is worse educated than the man who reads nothing. We would update that formulation by saying that anyone who gets news only from television is worse informed than someone who gets no news at all.
This first episode in the Free to Choose series follows a somewhat different narrative than does the corresponding chapter in the book, although the general thrust of ideas is quite similar.
(This post has been bumped since our students are currently reading the book.)
15:50. The Lesson of the Pencil. Producing even as humble a product as a pencil requires an incomprehensible amount of cooperation and coordination among thousands of people all over the world. Remarkably, the price system effectively coordinates their activities without anyone planning or overseeing the entire process.
21:40. History shows that the best system for reducing poverty is the free market.
25:20. Dr. Friedman summarizes the three major functions of prices in incentivizing and coordinating economic activity.
Since the Kefauver-Harris Amendments of 1962, the Food and Drug Administration has been tasked with approving for sale only drugs proven to be both safe and effective. Medical research, however, is an imperfect science. And FDA bureaucrats can make poor decisions due to incompetence, or because they are unduly influenced by political considerations. As a result, two types of errors can occur. First the FDA can mistakenly approve a drug that is not safe and effective. Second, the FDA can fail to approve a drug that is, in fact, safe and effective.
The first type of error imposes greater costs on the FDA than does the second. If the FDA approves a drug, and then people are harmed or die from taking the drug, the incident will generate very bad publicity, and the FDA bureaucrats will come under fire from elected officials and the public. The second type of error generally creates much less controversy. We rarely hear about drugs that never make it to market, even if people die who could have been saved by those drugs.
In order to avoid the backlash from approving a harmful drug, the FDA has the incentive to err on the side of excessive strictness, so that the FDA ends up delaying or deterring beneficial drugs. That’s why it takes something like 10 years and $1 billion to bring a new drug to market. In many cases, people die waiting for drugs to be approved. Or the high costs deter the pharmaceutical companies from developing the drug in the first place. As a result, people die.
But this arrangement serves the interests of the FDA bureaucrats. They get in trouble only for mistakenly approving drugs, not for rejecting them. That’s right; people die so that bureaucrats can have an easier life. Remind us again how socialism is ‘compassionate.’
Writing at the website of the Hoover Institution, law professor Richard Epstein offers just the latest story of the FDA’s obstructionism and interference with personal autonomy.
Earlier this month, the Food and Drug Administration rejected the application of Biomarin Pharmaceutical to market its drug Kyndrisa (drisapersen) for use in the treatment of Duchenne muscular dystrophy. The FDA, as is often the case when it rejects a drug application, listed all sorts of technical reasons why the data presented was not sufficient to establish by respectable scientific means that the drug in question was safe and effective in its intended use. Without question, much evidence from the clinical trials revealed serious complications from the drug’s use, including blood-platelet shortages that were potentially fatal, kidney damage, and severe injection-site reactions. But the no-treatment alternative could prove far worse.
Duchenne is a rare but fatal genetic disorder that attacks only young boys, roughly 1 in 3,500 to 5,000. Typically, it first manifests itself between two and five years of age. With time, it relentlessly weakens the skeletal muscles that control movement in the arms, legs, and trunk. Most of its victims are wheelchair-bound between the ages of seven and 13. By 20, many have died.
The source of the problem is the absence from the cell of the key chemical dystrophin, which is needed to control muscular movement. The proposed treatment is known as “exon-skipping,” which allows the body to produce the needed quantities of dystrophin. At present no drugs are on the market to fix the genetic defect. But other drugs are also under investigation. If the door is closed for drisapersen, it remains ajar for an unnamed drug produced by Sarepta Therapeutics, which will be reviewed by the FDA shortly. But, based on early rumblings from the FDA, it is likely that this drug too will be kept from the marketplace.
As might be expected, the decision by the FDA has left parent groups and their physicians tied up in knots. You can get a sense of their frustration by looking at the desperate petition of a mother whose son has the disease. Tonya Carlone wrote a public letter to the FDA pleading for the drug to be allowed on the market: “This medication has allowed my son, Gavin, to be able to ride a 2 wheel bike, to play on a soccer team, to run and play with his healthy 10 year old peers. Dr. Craig McDonald of UC Davis Medical Center and a Duchenne expert of over 30 years, has stated that he has never seen a boy with Duchenne at the age of 10 have as much function as Gavin.”
All irrelevant, says the FDA.
In a free society, no mother of a child with a deadly disease should ever have to write a desperate letter begging government bureaucrats to allow access to a drug that might save the child. The decision on which drugs free citizens will use should be made by those citizens and their doctors. No government bureaucrat should have anything to do with that decision. The FDA’s drug approval process is incompatible with basic principles of human freedom and personal autonomy, and should be completely abolished.
Until about 30 years ago, most states set their legal drinking age at 18. Then the federal government used constitutionally-dubious extortion–threatening to withhold highway funds–to coerce the states to raise the drinking age to 21. Despite the higher drinking age, 18-20 year olds who want to drink can always find a way to obtain alcohol.
But the problem with the drinking age is not just that it’s ineffective at reducing consumption. Perversely, the drinking age creates incentives that make alcohol consumption by young people less responsible. Specifically, the drinking age incentivizes binge drinking, and drives youth drinking underground, out of sight of older, more responsible adults.
In a recent article in Commentary magazine, John Steele Gordon provides a concise summary of the issue.
[T]he main consequence of this law has been to drive college-age alcohol consumption underground, which has in all likelihood increased that consumption and probably actually increased drunk driving. Unable to drink in public at bars and restaurants, where the owners and the other patrons would exert a restraining influence, college-age people drink in dorm rooms, basements, and fraternity houses. The result has been a marked increase in binge drinking. U.S. News and World Report reported that, “The CDC… found that young people between the ages of 12 and 20 drink 11 percent of all the alcohol consumed in the U.S., and more than 90 percent of this alcohol is consumed during binge drinking.”
That last statistic is quite remarkable. Not a lot of casual drinking among the young. They drink to get shit-faced. The reason is that prohibition, whether of drugs or alcohol, always increases the intensity of consumption. That’s because there’s no point to breaking the law just to nurse a light beer for an hour. If you’re going to run the legal risk, might as well make it worthwhile by getting hammered. That explains binge drinking, and also why Prohibition during the 1920s increased the consumption of hard liquor relative to beer and wine.
The same holds true for drugs. People often argue that we can’t legalize drugs because hard drugs like heroin are too dangerous. What they don’t understand is that hard drugs are themselves the product of prohibition. If drugs were decriminalized, people could meet their needs with milder opiates rather than resorting to heroin. Indeed, a major contributor to America’s current heroin epidemic is the government’s counterproductive crackdown on opioid painkillers.
For years, treatment centers saw few heroin addicts. But that started changing in the mid-2000s and took off a few years later after a government crackdown on opioid painkiller abuse. Unable to get pills, many addicts turned to heroin, the painkillers’ chemical cousin.
As usual, the better policy involves more freedom, not less. Time to bring the drinking age back down to 18, or preferably, eliminate it altogether.