Wednesday, January 28, 2004

Capitalism & Law: Reflexive Regulating

Virginia Postrel criticizes the Boston Globe for taking this criticism of FDA Commissioner Mark McClellan:
"He's really been a disaster, possibly the worst commissioner I've seen," said Dr. Sydney Wolfe, director of health research at consumer group Public Citizen in Washington. "He is more well-liked by the pharmaceutical industry than any other commissioner I can remember."
Postrel notes that “Wolfe doesn’t point to any bad policy outcomes. But McClellan doesn’t share his reflexive hatred of the pharmaceutical industry, so he must be bad.”

In one sense, however, Wolfe’s statement is logically consistent. Regulation itself is a preemptive condemnation of a business or industry. It is the opposite of objective law. Regulation assumes a business’s activities are illegal unless the business can show otherwise. Objective law, by contrast, protects the right of individuals to act unless the state can show that action violates the rights of others. Regulation does not protect individual rights, but the “public interest”, which simply means the arbitrary whims of the regulators.

The FDA presumes pharmaceutical companies will produce unsafe and worthless products unless the government regulates drug development. Thus, it’s consistent for Wolfe to argue an FDA commissioner should view the pharmaceutical companies with suspicion, even hatred. They are the enemy of the “public interest”, and the FDA is its guardian.

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