Im mackenzie. Welcome again to the university of chicago where a distinguished group of guests met together to watch a film and to discuss a film by Milton Friedman in series free to choose. In it, he examines the consumer movement, the whole development of high powered government agencies. In recent recent decades in this country, which have set out to protect the interest of the consumer. Now, does this consumerism really work. Or are there better ways of protecting the interest of the consumer . Thats the question, Milton Friedman asks in this film. The 1960s corvair condemned ralph nader as unsafe at any speed speed. Since naders attack, its being increasingly that we need government in the marketplace today. There are agencies all over washington where bureaucrats decide whats good for us. Agencies to control the prices we pay, the quality goods we can buy, the choice of products available. Its costing us more than 5 billion a year. Since the attack. The corvair. Government has been more and more money in the name of protecting the consumer consumer. This is hardly what the third president of the United States, thomas jefferson, whose monument this is had in mind when he defined a wise, frugal government as one which restrained men from injuring each other and them otherwise free to, regulate their own pursuits of industry and improvement. Ever since the corvair affair, the Us Government increasingly been muscling in between buyer and seller. In the marketplaces of america. By Thomas Jeffersons standards, what we have today is not a wise and frugal government, but a spendthrift and snooping government. The federal regulations that govern our lives are available in many places. One set is here in the library of congress in, washington, d. C. In 1936, the federal government established the federal register to record all of the regulations, hearings and other matters connected with the agencies in washington. This is volume one. Number one, in 1936, it took three volumes like this to record these matters. In 1937, it took. And then it grew and grew. And. At first, rather slowly. And gradually. But even so, by year, it took a bigger and bigger pile to hold all the regulations and hearings for that year. Then around 1970 came a veritable explosion. So that one pile is no longer enough to hold the regulations for that, it takes two and then three piles until. On one day in 1977, september 28, the federal register had no fewer than. 1754 pages. And these arent exactly you would call small pages either. Many of those regulations come from this Building Consumer product safety outlines the best of what you will. Please. Thank. The Consumer ProductSafety Commission is one of the newest agencies set up in our behalf. Coil. They help you . One of its jobs is to give advice to consumers and. Q that came in ways that those are involved and what has been done about the flammability of childrens. But its main function is produce rules and regulations, hundreds and hundreds of them designed to assure the safety of products on the market. Its hard to escape the invisible hand of the Consumer Product commission, except for food and drugs, ammunition and which are covered by other agencies. It has power to regulate just about anything you can imagine. I. Already it costs 41 million a year to test and regulate all these products on our behalf. And thats just the beginning. I think the commission employs highly trained to carry out tests like checking the brakes on, a bike. But the fact is that 80 of bike accidents are caused by human error. These tests may one day lead to safer brakes, but even that isnt sure. The one thing that is sure is that the regulations that come out of will make bikes more expensive and will reduce the variety available. Yes, they really are testing how much a strike. And the tests are very precise. The pressure must be exactly pound the match exactly and right angles. Consumer product safety. No matter how many tests are done, children swings are never to be totally safe. You cannot outlaw accidents. If you try you end up with ludicrous results. It hardly seems possible. But they really do use highly skilled people to devise regular machines. And what . Prevent toy guns from making too big a bang. But the Consumer Product safety of the commission, in effect, is deciding they think is good for us. They are taking away our freedom to choose. Okay. Consumer is dont have to be hemmed in by rules and regulations. Theyre protected by the market itself. They want the best possible products at the lowest and the selfinterest of the producer leads him to provide products in order to keep customers satisfied. After all, if they bring goods of low quality, youre not going to keep coming back. Buy them if they bring goods that dont serve your needs. Youre not going to buy them. And therefore they search out all over the world. The products that might meet your and might appeal to you. And stand in back of them. Because if they theyre going to go out of business. You see the difference between the market and political action. The governmental here nobody forces youre free. You do what you want. Theres no policeman to take money out of your pocket or to make sure that you do what youre told. Over a quarter of a century ago, i bought. Second hand a desk calculator for which i paid 300. One of these little calculators today which can buy for 10 or so, will do everything did and more beside what produced this tremendous in technology. It was selfinterest or if you prefer greed the greed of producers who wanted to produce something that they can make a dollar on the greed of consumers who wanted to buy things as cheaply as they could. Did government play a role this . Very little. Only by the road. Clear for human greed and selfinterest. To promote welfare of the consumer. When governments do in business, innovation is stifled. Railroads have been regulated for nearly a century, and they are one of our most backward industries. The Railroad Story shows what so often results from the good intentions of protection groups. In the 1860s, railroad rates lower in the United States than anywhere else in the world, and many customers thought that they were too high. They complained bitterly about the profits of the railroads. Now the railway men of the time had their problems too. Problems that arose out of the fierce competitiveness among them many railroad aides all trying to get their share of the market, all trying to make a name for. If you want see what their problems were as they saw them come and have a look at the the from inside this private car. It may not look as if the people who ran the railroads had any real problems. Some, like the owner of this private car, had done very well. This was the equivalent of the private jets of todays business tycoons. But for each one who succeeded many didnt survive the cutthroat competition. What we have here is a railroad map of the United States for the year 1882. It shows every railroad then in existence. The country was literally crisscrossed with railroads. Going to every remote hamlet and covering the nation from coast to coast between points far distant, like, for example, new york, chicago. There might be a a dozen lines that would be running those two points. Each of half dozen trying to get business would cut rate and rates would get very low. The people who benefited most from this competition were, the customers shipping goods on a long trip. On the other hand, between some segments that trip say for example, harrisburg and pittsburgh, there might be only a single line that was and that line would tank full advantage of its monopoly position. It would charge all that the traffic would bear. The result was that the sum of the fares for the short hauls was typically larger than the total sum charged. The long haul between the two distant points. Of course, none of the consumers complained about the low price for the long haul, but the consumers certainly did complain about the higher prices for the short hauls, and that was one of the major sources of leading ultimately to the establishment of the interstate Commerce Commission. The cartoonists the day delighted in pointing out that railroad had had tremendous political influence as indeed they did. They used the consumers complaints to get the government to establish a commission that would protect the railroads interests. It took about a decade to get the commission into full operation. By that time, needless to say the consumer advocates had on to their next crusade. But the railway men were there. They had soon learned how to use a commission to their own. They sold the long haul, short haul problem by raising the long haul rates. The customers ended paying more some protection. The first commissioner was thomas, a lawyer who represented the railroads for many years. The railroads continued to dominate the commercial. In the 1920s and thirties when trucks emerged as serious competitors Long Distance hauling. The railroads induced the commission to extend control over trucking truckers in their turn learned how to use a commission, protect themselves from competition competition. This firm carries freight to. And from the dayton, Ohio International airport. Its the only one serving some routes and its customers on it. But dayton freight has real problems. Its icc license only permitted to carry freight from dayton to detroit to serve other routes. Its had to buy rights from other icc license holders, including one who doesnt own a single truck. Its paid as much 100,000 a year for the privilege. Our company is in the process of trying get rights to go there now. Yes, well do. And thank you for calling, sir. The owners, the firm have been trying for years to get their license extended to cover routes. Now i have no argument with the people who already have icc permits excepting for the fact that this is a big country and since the inception of the icc in 1936, there been very few entrants into the business. They do not allow new entrants to come in and compete with those who are already in. Of course, dayton freight suffers, but so do the customers who pay higher freight charges. Quite frankly, i dont know why icc is sitting on its hands doing nothing. This is the third time to my knowledge that weve supported the application of dayton air freight to help save money, help Free Enterprise help the country save energy, help help. Its all comes down to the consumers going to pay for all of this and they are to blame the icc. It has to be the blame. Dayton air freight now has many of its trucks lying on trucks that could be providing a valuable service. Far from protecting consumers, the icc has ended up them worse off. As far as im concerned, there is no Free Enterprise and interstate commerce. It no longer exists. This country. You have to pay the price and have to pay the price very dearly. And not only means we have to pay the price, it means that consumer is paying price. The price consumers pay when it comes to medicine could be their lives. In the 19 century, pharmacies contained an impressive array of pills and potions. Most were ineffective. And some were deadly. There was an outcry about drugs that maimed or killed the food and Drug Administration. And in response to consumer pressure succeeded in banning a whole of medicines. The tonics and lotions, their excessive claims disappeared. The market in 1962. The amendment gave the fda power to regulate all drugs for effectiveness, as well as safety. Today, every drug in the United States must pass the fda. Its clear that this has protected us from some drugs with horrific side effects like thalidomide. And we all know of people who have benefited modern drugs. What we dont hear much about, however, are the beneficial drugs that the fda has prohibited prohibited. Well, if you examine the therapeutic significance of drugs that havent arrived in the u. S. , but are somewhere in the rest of the world, such in britain, you can come across numerous examples. The patient has suffered. For example, there are one or two drugs called beta blockers, which it now appears can prevent death after a heart attack. We call secondary prevention of coronary death after infarction, which, if available here, could be saving about 10,000 lives a year in the United States in the ten years after the 1962 amendments, no drug was approved for hypertension. Thats for the control of Blood Pressure in the United States. Whereas several were approved in britain in the entire career vascular area. Only one drug was approved in the five year period from 67 to 72. And this can be correlated with known problems at fda. These cards are taking to an fda official the documents required to get just one drug approved while high. There must be the new one they call me about. It took six years work by the drug company to get this drug passed here. All 119 viagra . Yes. Okay. Thank you very much. The implications for the patients are that therapeutic decisions . That used to be the preserve of the doctor and the patient are increasingly becoming made at a National Level by committees of experts. And these committees and the agency for whom they acting. The fda are highly skewed towards avoiding risks. So theres a tendency us to have drugs that are safer, but not to have drugs that are effective. Now ive heard remarkable statements from some of these committees in considering drugs. One has seen the statement. There are not enough patients with disease of this severity to warrant marketing. This drug for general use. Now, thats fine if what youre trying to do is to minimize drug toxicity for the whole population. But if you happen to be one of these, not enough patients and you have a disease that is of high severity or disease, thats very rare, then thats just tough on you. For ten years. Mrs. Estero dean suffered from severe asthma. The medication she received serious side effects. Her condition was getting worse, but the drug her doctor preferred was prohibited by the fda. So twice a year mrs. Usdin had to out on a journey. I had been very sick. I had been in and out of the hospital several times. And they couldnt seem. To find a way to control the asthma. And i had to change lifestyle once i was out, even for short time. Mainly because cortisone derivatives were softening the bones, causing a puffiness, the face and other changes in my body. The doctors were pretty anxious to get me off the cortisone. The drug her doctor wanted her to have had available for use for five years in canada. Once across border at niagara falls, mrs. Usdin could make use of a prescribed sheen that shed obtained from a canadian. All she had to do was go to any pharmacy. There could buy the drug that was totally prohibited in her own country. The drug worked immediately. This one made such a difference in my life both because of the shortness of breath being resolved and also because now we didnt have to worry so much about. The softening of the bones. Fortunately, once i got that medicine very everything sort of reverted back to much more of a normal lifestyle and im very grateful that i was able to find relief. It was easy for mrs. Usdin to get around the fda regulations because she happens to live near the canadian border. Not everyone is so lucky. Its no accident that despite the best of intentions, the food and Drug Administration operates so as to discourage development and prevent the marketing of new and potentially useful drugs. Put yourself in the position of a bureaucrat who works over there. Suppose you approve a drug that turns to be dangerous. A your name is going to be on the front page of every newspaper. You will be in deep disgrace. On the other hand, suppose you make the mistake of failing to approve a drug that could saved thousands of lives. Who will know the people whose lives might have been saved will not be around there. Relatives are unlikely to know, but there was something that could have saved their lives. A few doctors, a few researchers workers. They will be disgruntled. They will know you or i, if we were in the position of that bureaucrat, would behave exactly the same way. Our own interest would demand that we take any chance whatsoever. Almost every fuzing to approve a good drug in order to be sure that we never approve a bad one. Drug companies can no afford to develop new drugs in the United States for patients with rare diseases. Increasingly, they must rely on drugs high volume sales for drug firms have already gone of business, and the number new drugs introduced is going down. And where will it all lead . We simply havent learned from experience. Remember prohibition. In a of moral righteousness at the end of the first world war, when many young men were overseas. The nondrinkers imposed on of us prohibition of alcohol. Now they did it for our own good. And there is no doubt that alcohol is a dangerous substance. Unquestionably, more lives are each year through alcohol and also the smoking a cigaret than through all the dangerous that the fda controls. But where did it lead this place . Is today a legitimate . Its the oldest bar in chicago, but during prohibition days it was a speakeasy. Al capone. Bugs moran. Many of the other gangsters of the day sat this very bar planning exploits that made them so notorious. Murder, extortion. Hijack. Bootlegging. Who were the customers who came here . They were. Who regarded themselves as respectable individuals who would never have of the activities that al capone moran were engaged in. They wanted a drink, but order to have a drink. They had to break the law. Prohibition didnt drinking, but it did convert a lot of otherwise law obedient citizens into law breakers. Fortunately were a very long way from today with the prohibition cyclamate and ddt. But make no mistake it there is already something of a gray market in drugs that are prohibited by the fda. Many a conscientious physician feels himself in a dilemma caught between what he regards as a welfare of his patient and strict obedience to the law. If continue down this path, there is no doubt where it will end. After all, if it is appropriate for government to protect us from using dangerous cat guns and bicycles, the logical laws for prohibiting still more activities such as hang gliding motorcycling, skiing. If the government is to protec