Diamondeye wrote:
[...]especially when each of those 50 systems must interact to one degree or another with all 49 other systems.
This is sort of a nit-pick, but I don't think there would be much interaction between the systems themselves. Businesses selling or producing goods in multiple states would need to meet the requirements of each of them in order to stay in those markets, of course. As I said, there is a valid efficiency concern. However, bear in mind that dealing with varying conditions across multiple markets is fact of life for anyone that does business in multiple locales. This is not an insurmountable obstacle to entrepreneurship. Businesses already frequently opt to vary their product lines, prices, advertising, and so on across different markets. Meeting different regulatory demands is really not all that different from meeting different market demands.
Some businesses might address this by simply producing their goods according to the most stringent of the regulatory systems. Others may choose to abandon markets whose regulations they don't care to meet. This is part of the feedback system that I believe would help shape and balance the states' policies. Ex. "Hm, if we set this particular standard too high, businesses pull out of our state". With a federally regulated system, you don't this kind of feedback because no one is willing to bail out of the entire U.S. market.
Diamondeye wrote:
I also do not see that the homogeneity argument is valid. It's a very good argument when it applies to things that are actually about people, such as education (which is why I've used that as an example of a much better area to concentrate on eliminating federal interference) or other services that are directly about people.
That doesn't apply to food and drugs however. Food and drugs aren't people. A potato does not have a different shelf life because it's grown in Montana as opposed to Georgia; if it does it's because it's a different variety of potato and if you transplanted the plants to each other's locations you'd suddenly get the opposite type in each place. The Levothyroxin I take here in Texas is the same pill I took in Ohio and it does not need a different, "Texan" regulation because by God, this here's Texas and we don't 'llow no Yankee thyroid pills 'round here.
Of course food and drugs are not people. Education isn't person, either. Likewise, high school algebra and chemistry curricula are substantially similar everywhere -- arguably more similar to one another than are the different varieties of potatoes. That isn't the point. The point is that these are all things produced, transacted, and consumed by people, and different people are going to have different ideas about how to best do those things and balance those operations.
For instance, looser regulations may lower the cost of production and the time-to-market for drugs. This is benefit to the consumer, but it has to be weighed against the potential health risk of inadequately researched drugs, and so on. Risk vs. reward is a very basic economic tension. The constituents of some states may have different tolerances for risk or for cost than others, and would be better served by a different balance of regulations. For instance, states with higher poverty rates might choose to lean more towards the lower cost side of the equation than more affluent states. Even within a state, there may not be a single balance across all products. Perhaps states like Kentucky and Virginia with (comparatively) very high lung, throat, and mouth cancer rates would want to be a more permissive with respect with chemotherapy drugs that are targeted to these cancers, but be more conservative with other drugs. Perhaps states with high obesity and heart disease rates would want to adopt tighter regulation of things like trans fat, and so on. The list of potential differences is too myriad to enumerate, really. Which brings me to this:
Diamondeye wrote:
I don't know in what respect 50 different systems could be more efficient than just one, [...]
As I said before, the general answer to this is by betting able to take advantage of varying local conditions. This isn't necessarily restricted to
economic efficiency, although that's probably part of it. It's also about how efficiently the system can meet the variegated and constantly shifting desires (like the examples above) of the people it ostensibly serves. A one-size-fits-all system is generally less efficient at accomplishing this. Simply put: which is more efficient at meeting people's demand for cereal: a "market" in which there is exactly and only one variety sold at one price, or a market in which there are many varieties with many different price-points? Unless your population is remarkably homogeneous, the answer is obvious. A diversity of regulatory system could be more efficient than a federal system for the same reasons that diverse markets tend to be more efficient
over all than monopolies/monopsonies, even thought the latter clearly has less cost in terms of duplicated effort, and so on.
Diamondeye wrote:
As for the idea that state run systems would end up being substantially similar in the long run, that's a possibility. However, it largely illustrates the silliness of switching to state-oriented regulations in the first place; if they're all going to be substantially the same, where is the (so far unexplained) possibility for any improvement, in efficiency or otherwise? If homogeneity is bad, then isn't the state-oriented system no better since it will likely be just as homogenous? Why go to the trouble of switching at all since in the long run it won't be all that different?
I need to clarify a few things:
First, when I said "substantially similar", what I meant was "similar enough as to be reasonably interoperable". I doubt that the state-level approach would ever settle into something as monolithic as what we have now via federal regulation. There is a balancing act between the benefits of diversity and the benefits of similarity. I believe that by breaking up the "monopoly" of federal regulation, the system would strike a more natural equilibrium between these two factors, which is to say "substantially similar" as opposed to "completely uniform".
Secondly, I suppose I should really say that homogeneity isn't necessarily bad. The problem is actually monopoly. Forced homogeneity is just the mechanism through which the harm is done. If multiple agents settle into a homogeneous state on their volition, there's nothing anymore "wrong" with this than any other state.
Having said that, even supposing that the many states did converge on a more-or-less uniform state, this is still crucially different than a uniform state produced by federal level regulation in a couple ways:
One, the state-level system is free to break that uniform state at any time. Unless you believe that the production of food and drugs and the people that use them are all completely static entities (bearing in mind that the regulation thereof encompasses many political, moral, and economic concerns), it is inevitable that there will be changing conditions over time. Even the field of agriculture (which some might assume is low tech and plodding) experiences change -- sometimes rapidly. In recent years, we've seen the introduction of genetically modified crops, for instance.
This brings me to the other major difference: when new conditions like this arise, it isn't clear how we should proceed. Different states are likely to take different regulatory approaches, and this is good thing for everyone. By actually trying different approaches simultaneously, we gain empirical evidence of how well these various policies actually work relative to one another. My speculation is that, like in most other human affairs, people tend to gravitate to those things that work well, rather than the things that don't. While this might mean that the initial "perturbations" eventually dissipate, the process itself is important. What it produces may ultimately have the trait of homogeneity in common with a system produced by federal-level regulation, it would not yield the
same final state.
Or, in any case, would be exceedingly unlikely to IMHO. Given a homogeneous final state produced by a "top-down", centralized planning process and a homogeneous final state produced by a multi-agent system with at least
some degree of competitive forces, I'll choose the latter any day. While neither result may be ideal, I have more faith that such a process will produce a more ideal result than any central planning process.