Consumer Protection for Intellectuals
Nate Anderson at Ars Technica has a good write-up of the New America Foundation’s interesting proposal for labeling of broadband services, something akin to the nutrition labels we have for food.
Labeling and disclosure are better than direct regulation of the terms on which goods and services can be sold, of course. Labeling does not presume to decide unalterably what factors are or will be the most salient to consumers. But it does seek to channel those interests, and it does presume that consumers discover information that is important to them via labels. (I dealt with some of these concepts in my recent post about privacy notices.)
What labeling is really about, I believe, is pushing consumers to focus on the terms that intellectuals believe are most interesting. Smart people’s interests often match up with everyone else’s, but not always. Anderson’s write-up wonders aloud “whether requiring disclosure of the ‘maximum round-trip latency to border router’ will do more than induce eye glaze among most broadband users.”
I want my ISP to give me a live tech-support person that can solve the problem with my wifi router, but that didn’t make it into New America’s labeling plan. Any labeling plan will likely be either overinclusive or underinclusive or both, obscuring and omitting the most relevant information.
Yes, labeling is “market-friendlier” than regulation dictating what broadband providers can and can’t offer. But if we believe that markets discover the dimensions of goods and services that are salient to consumers, we can also believe that markets discover what information consumers want, and how they best learn it.
A New Regulation I Can Support
Normally I would be happy to leave labelling decisions to retailers and manufacturers, but here’s a proposal for a new mandatory labelling scheme that I can get behind.
James Gibney, a reporter from the Atlantic, called me last week to ask some questions about dairy supports. He was preparing a blog post to propose a new labelling idea that might help break the frustrating stranglehold that the farm lobby has over U.S. agricultural policy. Here’s James’ idea:
To wit, every product whose ingredients benefit from a subsidy should include the following language on the label:
“This product has been subsidized by the U.S. government at taxpayer expense. For more information, please visit usda.gov.”
And every product that benefits from tariff protection should have the following language on the label:
“This product is protected from foreign competition by U.S. import tariffs. Its price is higher as a result. For more information, please visit usitc.gov.”
I like it. For more on Cato’s work on agricultural policy, see here and here.
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