Can I Out-Libertarian Bryan Caplan?

While I did get a perfect score on his Libertarian Purity Test, I never thought I'd see the day when I would be willing to accept a more extreme conclusion than Caplan. Well, that day has come.

Caplan discusses a recent Penn and Teller episode about the Americans With Disabilities Act. Apparently, P&T argue against ADA regulations designed to help the disabled on the grounds that they backfire and wind up hurting their intended beneficiaries. While Bryan gladly accepts the notion that employment-related regulations often have perverse effects, it seems ludicrous to Bryan for P&T to say that "using regulation to make life easier for the handicapped stops them from helping themselves, robbing them of the drive to overcome their disabilities."

I have not seen the episode in question so I don't know what specific mechanism P&T might have described to explain this phenomenon. And while I'm not at all interested in defending anything along the lines of the typical conservative critique of welfare, I think there is a perfectly plausible economic argument to explain why regulations intended to make life easier for the handicapped - say, mandatory ramps or elevators to complement stairs - does indeed stop them from helping themselves. Or more specifically, stops others in general from helping the disabled.

We live in a world that is not wheelchair friendly, despite the dictates of the ADA. That is partly due to nature - wheelchairs aren't very good for off roading across bumpy terrain, nor for climbing very steep inclines - and partly due to the ubiquity and cost concerns of manmade structures. Many buildings that were constructed before the ADA was passed, or that were constructed in other countries, are not wheelchair accessible. Further, even if a building is wheelchair accessible, the elevators and ramps may often be much less convenient than the stairs.

The regulations mandating wheelchair accessibility have the unintended consequence of reducing the demand for something like Dean Kamen's iBOT. The iBOT is capable of climbing up and down stairs, traveling off road through a large variety of terrain, and allows the user to rise from a sitting level to approximately 6 ft. tall, in order to reach an object up high or speak to others at eye-level. Of course, at over $26,000, the iBOT may be out of many people's price range. But price is partly a function of demand, and demand for innovations like the iBOT would be even higher in the absence of regulations mandating wheelchair accessibility. Higher demand means a greater incentive for inventors to design a product and introduce it earlier than they might have done otherwise. Earlier introduction and wider production runs also mean that prices drop sooner than they would have otherwise. So it is very possible that something like the iBOT would have been introduced years earlier, and would be much cheaper, if not for regulations that reduce the incentive for innovators to help improve the lives of the disabled. In a sense, regulations like mandated wheelchair accessibility crowd out market solutions.

Now, all that said, I have no idea if the net effect is positive or negative. It may very well be the case that, despite the delayed introduction and higher prices of technologies like the iBOT, the overall effect to the disabled of wheelchair accessibility laws is still positive. I just wanted to come up with a plausible perverse effects mechanism for why this might not be as obvious as it seems.

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I think this is incorrect.

I think this is incorrect. While regulation hurt everyone in that they increase cost, they do benefit the handicapped who happen to prefer free ramps to expensive stair-climbing wheelchairs. If there is a price at which the handicap would prefer the stair-climbing thingie instead of the ramp, if it is physically possible to produce at this price, then it will be done. There is no need for "gradual" acceptance of the product leading to decrease prices. You don't need to invest on your profits, if there is a possible profit in the future, investors can kick in.

This is a common fallacy put forward by people who require protectionism for starting businesses.

Put it this way, if an alien race went on earth, and built ramps for free everywhere, then came back to outer space. Would you regulate to prevent it from happening by claiming it prevents start-up from building capital to provide better alternatives?

Arthur, My argument doesn't

Arthur,

My argument doesn't rest on a single firm reinvesting its profits back into its business. The potential demand effects the scale of production as well as the number of firms willing to enter the market. I was just using the iBOT as but one single example of the sort of technology that could be developed to address the problem of wheelchair accessibility.

As for the alien question, as I said, I make no claims as to which effect is greater - the benefit of ramps or the benefit of cheaper technology.

You're missing the point. If

You're missing the point. If you are right, then protectionism may be justified. Therefore, economical argument against protectionism can be used against your argument.

Wheelchair users cannot be made worst off by having free ramps. Compare the two situations.

a) Free ramp
b) No free ramp

Assume the no free ramp situation (b) evolves to a state preferable to the initial free ramp situation (b'). Obviously, adding free ramps in this state does not make it worst, let's call it b'+a. b'+a > a
Ressources in the market are allocated in a certain way in b'+a. By allocating them in that way in the state a, an investor can make a profit, thus taking a to b'+a

Regulation not like international trade

The ramps are not just provided to the US for free, but are paid for by Americans, specifically by the people providing the building. Nor are they freely purchased, but building providers are forced to provide them at their own expense. This can be expected to reduce the supply of buildings and probably harms the overall quality of buildings, because the builders are constrained in their choices by a no doubt labyrinthine set of regulations.

While disabled Americans benefit from the ramps to some extent, they along with all users are at the same time harmed by the reduced supply and quality of buildings.

The difference between this and international trade is that the latter is voluntary.

It meanwhile remains true that the apparent harm to the disabled of the reduced availability of ramps (if the regulations were abandoned) would be mitigated by actions of the disabled themselves and the entrepreneurs who serve that market. That is, suppose that a disabled person values the ability to access a building at $100. He can currently access it for free by using a ramp. However, if the ramp is removed, the harm to him is not necessarily $100, because he might be able to buy a wheelchair that can do stairs for (say) $50 (once its cost is divided by the number of buildings he wants to enter). Thus, where he had been accessing the building for free, now he is accessing the building for $50. The cost to him, then, is $50, rather than $100. Furthermore, a healthy market in products for the disabled can over time reduce the cost of devices such as stair-climbing wheelchairs, so that as time goes by the cost to him may only be $20 or $10 to enter the building. This market may not exist (or maybe be insufficiently active) if buildings have ramps.

The point described in that last paragraph can also be applied to international trade as you say, but there is a key difference in that international trade is voluntary. Moreover, in international trade there are entrepreneurs over the national border who are innovating and bringing costs down, whereas a government regulation that forces building providers to include ramps blocks innovation on the part of the ramp-builders by mandating the details of the ramp (which it must do to keep them from cheating).

Translating this point to international trade, as you suggest, does show that the cost of closing the borders is to to some degree mitigated by the ability of local producers to provide substitutes. However, this does not negate the overall argument in favor of free international trade because the principle of comparative advantage still holds. The principle of comparative advantage cannot be applied in the case of regulations forcing building providers to provide ramps. A key component is missing: the voluntary nature of the trades involved (which is what ensures that the provider with the comparative advantage wins).

While disabled Americans

While disabled Americans benefit from the ramps to some extent, they along with all users are at the same time harmed by the reduced supply and quality -of buildings.

Yup, first point I made.

The difference between this and international trade is that the latter is voluntary.

No one compared this and international trade.

All I said was that the original poster's argument about stair-climbing wheelchair boiled down to the protectionist argument about baby businesses. Since the later has been debunked many time, so is the op's argument.

Protectionism is about international trade

So the point about international trade is relevant.

Non sequitur. I'm not making

Non sequitur.
I'm not making a parallel with international trade, I am making a parallel with the shielding against the competition sophism, which is often used by protectionism advocates.
The original poster pretty much says: if the State was not competing with the stair-climbing industry, the situation would be better for the handicapped. The only way the handicap suffer from this is from taxes, or building supply reduction, but these are not the causes of harm invoked. The poster says that things would be better because such alternate business would be able to develop, this is wrong.

Does it really apply?

I've been reading explanations of the arguments against the infant industry argument, and they don't seem to apply here. For example, here we can read:

Economists have long accepted the theoretical validity of IIA. However, we have raised many questions regarding the practical application.

That seems to admit that the theoretical argument is valid. It alludes to some particular issues, some of which I examine below:

It is not self-evident that an infant industry requires protection to get started.

Well, okay, it is not self-evident that it requires it, but that is a rather weak counterargument considering that Micha did not make the strong statement that the disabled would be better off without ramps, but instead made the weaker statement that he did not know what the net effect would be.

It is most difficult for the government to identify an industry that deserves infant industry protection.

Okay, but in this case we aren't talking about a government identifying an industry, but laissez-faire (leaving the building providers alone to do what they want). Yes, government is incompetent and therefore should not be in the business of intervening - but that cannot be extended against Micha, because Micha is arguing for laissez-faire here, not for government identification of infant industries.

The example also indicates that a mistake tends to become irreversible.

This is about entrenched government. Again, I really don't see how it applies here since Micha was not arguing for setting up a ministry of stair-climbing wheelchairs (which is vulnerable to this criticism) but for laissez-faire (which is not).

And similarly with the other arguments that I saw at that site. So it would seem as though many of the arguments against the infant industry argument simply do not translate to this situation.

Economists have long

Economists have long accepted the theoretical validity of IIA.

I beg to differ... if an IIA needs more capital to survive long enough to be profitable, it can find it in the market.

Could be

I would need to think about it. Curiously, I didn't find that argument. If it's a knock-down argument I'm puzzled why it seems not well represented.

I'm thinking it has

I'm thinking it has something to do with the fact that the IIA is an industry-wide argument, with all of the implications that go along with that, and not a firm-wide argument. That said, there are obvious similarities between any argument that essentially says government protection is needed to prevent a firm (or group of firms) from going out of business, the flipside being that government protection is needed for a firm or group of firms to become and/or remain competitive. While this argument takes the form of IIA, anti-dumping, or national defense reasons in the international arena, it takes the form of predatory pricing on the domestic side.

Hmm?

While disabled Americans benefit from the ramps to some extent, they along with all users are at the same time harmed by the reduced supply and quality of buildings.

But of course! We'd all be enjoying vastly more Disneylands were it not for wheelchair accessibility regulations.

Nope, but Disneyland could

Nope, but Disneyland could be a little bigger for example, have more interesting rides etc etc. Anyway Disneyland would have ramps no matter the law, they don't cost that much and it's good for PR.

Anyway Disneyland would have

Anyway Disneyland would have ramps no matter the law, they don't cost that much and it's good for PR.

Exactly.

Does not generalize

You seemed to imply some sort of contradiction, but the existence of some structures that would have ramps anyway goes without saying and does not contradict the point to which you were replying.

I'm saying that I doubt

I'm saying that I doubt there is a "reduced supply of quantity and/or quality of buildings" due to wheechair accessibility requirements. I gave the Disneyland example because many of their facilities have wheelchair access. Absent this requirement, I'm arguing we should not expect a greater number of Disneylands, or more funhouses (or whatever) at the existing Disneylands. The reason being that I seriously doubt that a wheelchair access requirement is a signiifcant cost in the economic calculus of either one. In fact, it's probably in the noise.

Further, the "economic model" that predicts fewer Disneylands, or quantity/quality of structures in existing Disneylands because of said requirements, undervalues - or worse ignores - 1) the improvement to Disneyland's reputation (which surely serves to bring in more $$$), and 2) the increased revenue from people who are actually handicapped who otherwise (presumably) would not have come.

I'm no fan of GovCo regulation, but the part of the argument that asserts said regulation reduces "quantity/quality" I think is practically silly.

Straw man

Further, the "economic model" that predicts fewer Disneylands

That is not what I said. I said This can be expected to reduce the supply of buildings and probably harms the overall quality of buildings, because the builders are constrained in their choices by a no doubt labyrinthine set of regulations.

I have said nowhere that every building or even every category of building would be equally affected. Disneyland is the sort of place that would probably be massively accessible regardless, for various reasons special to Disneyland and places like it, reasons which do not generalize to all buildings.

re:Strawman

I have said nowhere that every building or even every category of building would be equally affected.

Nor did I argue you did.

Disneyland is the sort of place that would probably be massively accessible regardless, for various reasons special to Disneyland and places like it, reasons which do not generalize to all buildings.

Your original claim regarding the reduced quantity & quality of buildings resulting from coercive regulation appeared unqualified. Would the following then be a fair rewrite:

"This [coercive regulation] can be expected to reduce the supply of buildings and probably harms the overall quality of buildings, except when it doesn't."

It would not be a fair rewrite

I do not understand why you think it would. What do you mean by "unqualified" if not "every building" - which you deny meaning? Why do you think a probabilistic statement is improved by adding exceptions? It's like saying, "you will probably not win the lottery, except when you win it". You don't need to add in that exception. The probability already allows for exceptions. Why do you think that the example of a theme park that would have ramps regardless of what the law was, is significant evidence that requiring ramps would not reduce the supply of buildings? It's like saying, "requiring everyone in the room to be over six feet tall (ramps) has not stopped this seven-foot-tall man (Disneyland) from entering the room (existing) and therefore it would not reduce the total number of people in the room (supply of buildings)".

re: rewrite

I do not understand why you think it would. What do you mean by "unqualified" if not "every building" - which you deny meaning?

What I meant by unqualified, was that your claim didn't distinquish which proprietors would suffer reduced quality/quantity of buildings. I offered the Disneyland example, whose buildings even you conceeded would not suffer in quantity/quality from said regulation.

Why do you think that the example of a theme park that would have ramps regardless of what the law was, is significant evidence that requiring ramps would not reduce the supply of buildings?

The supply of buildings at Disneyland, or generally for all proprietors?

In any case, let's remember that I'm the one who's skeptical of your claim, i.e. that coercive regulations like this diminish the quantity and/or quality of buildings - at Disneyland or anywhere else. It seems to me that for all but the smallest of proprietors, the cost of compliance, while maybe a nuisance, does not "probably diminish the quantity or quality" of their building(s).

Besides, you might want to consider the possibility that buildings could be of incrementally higher quality due to having to install wheelchair access facilities. Personally speaking, even tho I'm not handicapped, I love the capacious shitters in handicap-ready bathrooms. There's just a lot more room in them, they're more comfortable. And I have often seen people using the ramps at Starbucks (for instance) to wheel their luggage behind them rather than having to struggle to lift it up the steps. Making that business' building in fact more user friendly.

Unintended consequences slice both ways sometimes.

Aggregates

What I meant by unqualified, was that your claim didn't distinquish which proprietors would suffer reduced quality/quantity of buildings.

I was speaking in the aggregate, or what comes to the same thing, I was speaking about the average. That perfectly allows many proprietors to suffer no harm at all. But actually I already thought that I addressed this interpretation of yours when I wrote that I have said nowhere that every building or even every category of building would be equally affected. I was pointing out there that I was speaking about the aggregate effect. After all, I did use the word "supply", which normally applies to an aggregate, and not to a single item.

The supply of buildings at Disneyland, or generally for all proprietors?

Aggregate supply of buildings generally. You are the one who brought up Disneyland after I had made that statement about supply, so obviously I was not talking about Disneyland. This statement:

While disabled Americans benefit from the ramps to some extent, they along with all users are at the same time harmed by the reduced supply and quality of buildings.

was made before you brought up Disneyland, and so did not refer specifically to Disneyland. It was in fact in reference to "the supply of buildings" - which is a statement about the aggregate of all buildings. I am saying that marginal buildings that are barely profitable absent regulation would not get built. I would also expect an impact on total square footage summed over all buildings that still do get built.

It seems to me that for all but the smallest of proprietors, the cost of compliance, while maybe a nuisance, does not "probably diminish the quantity or quality" of their building(s).

When you're talking about a country the size of the US, probabilistic effects that seem small and insignificant on the individual level add up to real differences in numbers. Ramps and the like anyway are not cheap. For one thing, they take up an awful lot of space, and space is expensive. Have you ever paid rent on a parking space for your car in the city? For another, things like handicap elevators are not themselves cheap (they are elevators), and when you consider how rarely they're used in many buildings, they're incredibly expensive. I would call these costs a bit more than a "nuisance".

I love the capacious shitters in handicap-ready bathrooms.

That is space that is being taken away from other uses. The gain is seen, the loss - since you can't pinpoint where the space was taken from - is not seen. That which is seen versus that which is not seen. The illusion of net benefit when there has only been a shift of resources from an unknown X to a known Y gets us every time.

Building owners love their visitors. They want to make their visitors happy. They will do their best to maximize the overall happiness of their visitors. If their visitors love ramps so much that putting in ramps would draw more in,, then they would put in ramps. Where regulations are consistent with a net benefit, they are superfluous. They only have a real effect where their effect is, in the estimation of the proprietor, a net harm to his bottom line (and therefore, by implication, to his building's users).

re: Aggregates

I am saying that marginal buildings that are barely profitable absent regulation would not get built.

Do you have real world evidence to support this claim? Because a brief web search turned up a FAQ stating that ADA compliance accounts for about 1% of the overall cost of new construction. And that's in the aggregate, which should appeal to you ;-)

I would also expect an impact on total square footage summed over all buildings that still do get built.

_sigh_

People don't shop in the "sum of all space," they shop in one store at a time. And in any case, the quality of a store is by no means necessarily proportional to its square footage. Your average retail store isn't going to not be built, or suffer a loss of "quality," merely because the john has to be larger or a ramp to the front door has to built. What I know about the costs involved in endeavors like this suggests to me that's bunk. And you need to remember that people in wheelchairs have money. They're real consumers. Accomodating their mode of access to commercial facilities increases the potential number of consumers. In the aggregate of course.

One percent is significant

Do you have real world evidence to support this claim?

No, it's theory, same as the theory about the effect of the minimum wage.

ADA compliance accounts for about 1% of the overall cost of new construction.

And you don't think that's significant? Anyway, to enhance the impact, think of it this way: that 1% is 1% of the overall. It's going to vary from building to building, with the cost of compliance for some builders being higher than for others - and the ones for whom it is highest will tend to be among those who choose not to build and so will not even be counted in this cost.

People don't shop in the "sum of all space," they shop in one store at a time.

No kidding, but when you talk about the relevant aggregates, aggregate space is the sort of thing you talk about - for good reason. Adding up buildings makes less sense than adding up total floor space. Think about it.

And in any case, the quality of a store is by no means necessarily proportional to its square footage.

I didn't mean to imply that it was - it's just harder to talk about quality in the aggregate. What are you going to add up? I could probably do it by asking a contractor about various building materials and so on, and then making a statement about how much of building material X is used versus how much of lower-quality building material Y is used. But I don't really see the point of complicating the discussion when there seems to be such a fundamental misunderstanding between us about the method, meaning, and value of talking about aggregates in the first place.

re: one percent is significant

No, it's theory, same as the theory about the effect of the minimum wage.

And if real world evidence is lacking to support the theory, or even contradicts it, what do you do?

And you don't think that's significant?

Compared to 99%, no. I think 1%, regardless of project scope, is unlikely to nix any individual new building project, or, it follows, the aggregate of such projects. The theory is probably wrong.

[...]and the ones for whom it is highest will tend to be among those who choose not to build and so will not even be counted in this cost.

Well we're at a dead-end then - you support a theory which predicts such cases exist, and I'm skeptical they actually do. I'm curious, if you weren't aware of any evidence to support this theory, what persuaded you to believe it's true, and support it as tho it were?

I didn't mean to imply that it was - it's just harder to talk about quality in the aggregate. What are you going to add up?

Admittedly, I believe it would be difficult to tease out any meaningful increase or loss of quality in new construction from the available data on the aggregate costs of compliance. Which, if you ask me, is a good reason to refrain from making any quantitative claims about that one way or another. ;-)

Exactly. The burden of the

Exactly. The burden of the cost is probably mostly bore by the building builders, there is a reduce quality / supply effect but it's likely to be faint. Overall it's safe to say that a handicapped person benefit from the regulation (which is not an endorsement of said regulation, it does hurt, rob and enslave other people)

"Obviously, adding free

"Obviously, adding free ramps in this state..."

Which state? B or B' ?

"...let's call it b'+a. "

Let's call what b'+a ? A situation in which free ramps are added to B? A situation in which free ramps are added to B'? Neither? Both?

Your argument is muddled. Clear it up.

Adding free ramp in b'. b'+a

Adding free ramp in b'.
b'+a being the state where the stair-climbing wheelchairs have developed and free ramp have been added nonetheless.

It's the infant industry argument... "the state regulation makes unfair competition with the infant industry of stair climbing therefore it cannot develop". This is blatantly wrong.

Handicap regulations harm us all

Regulations that protect mental defectives harm us all. Here is proof.