Are simple, easy-to-administer rules ruining America? There’s a classic debate over whether laws and regulations should be simple rules or complex standards. Systems with simple rules are easier to adminster, but they get results wrong some of the time. Standards get the right result more often, but they are expensive to adminster. A fanciful example: speed limits. A single speed limit—60 m.p.h.—may be generally OK, but still often wrong because it’s too high in bad weather or at night, or too low when there’s no one on the road or for drivers rushing to the hospital. A standard would get it right, but be harder for cops to administer on the spot. (Yes, I know drivers are supposed to change their speed based on conditions, but this is just for illustration.) Cheap simple rules are should be preferred when error costs (the frequency and severity of wrong results) are low, but standards should be used when the error costs are high enough. But is it possible that using simple rules generally will create a calloused public that will seek to game the system more and make the simple rules less efficient?
That question poppoed into my mind when I read Frank Bruni’s op-ed castigating Tim Ferriss for suggesting that travelers place unloaded starter guns in their checked bags. (Ferriss says this will guarantee close scrutiny, and reduce the risk of your bag being lost.) Bruni says that there’s an epidemic of selfishness in the country:
While I doubt there will be a rush on starter pistols by airline passengers — it’s just too much trouble, and too bizarre — his overarching interest in gaming the system at hand is mirrored in other Americans’ behavior. So is his emphasis on personal advantage over the public good, which would be undermined if every traveler did as he counseled. There’d be bedlam in airport security operations and a ludicrous number of people carrying around what could be mistaken for lethal weapons.
Selfishness run amok is a national disease (and, to judge by Greece, Italy and a few other European countries, an international epidemic). Too many people behave as if they live in a civic vacuum, no broader implications to their individual behavior.
Is a system of simple rules encouraging this? Perhaps if the system weren’t so easy to game, people would do it less? If people didn’t feel like others were taking advantage of loopholes, they wouldn’t try to do the same? If TSA agents could exercise judgment to punish—or make things harder—for folks like Ferriss, perhaps everyone would just follow the rules and everything would go more smoothely?
But consider also this Planet Money episode, where economist Luigi Zingales argues that America is becoming more like Italy: a place where connections and money determine public policy, instead of the general welfare. He argues that we need simpler rules, not more nuanced standards. As he sees it, the more nuanced a rule is, the more likely it is to be read only by the rich (or their employees) seeking to take advantage of the nuanced sub-clauses. These nuances are often intentional giveaways to favored groups or businesses. And this looks a lot like Italy, in Zingales’ telling.
In Italy, post-World War II communist governments needed to convince businesses that they weren’t about to have their property and money confiscated by the government. So the government offered sweetheart deals and guarantees to businesses. But when bribes (or sweet contracts) first start being used, they become necessary. This raises prices for everyone, from infrastructure projects to produce. And it’s not just money: it’s trust. When he arrived here, Zingales was shocked when Americans paid attention to local leaders’ warnings about a severe storm. He thought that the direction to tape up windows meant someone’s brother owned a tape factory. In Italy, as Zingales describes it, it was a good idea to find out what the government wants you to do—then do the opposite. If people can’t trust their leaders, the costs of effectively handling crises and day-to-day government activities become enormous.
But maybe here the issue isn’t that the rules are too simple: it’s that they’re too complex. Getting on a plane is a massive ordeal. And apparently it’s OK to pack an unloaded starter gun in checked luggage. (Are others forbidden?) Perhaps if it were simpler to get on a plane (and to check luggage), everyone wouldn’t feel so shafted, and Bruni’s “selfishness” wouldn’t be such a problem.