Trends
TRUCKING FREEDOM BENEFITS PUBLIC
The regulated trucking industry, fearing loss of its ICC-enforced cartel privileges, is raising the specter of "chaos" and "cut-throat competition" as the likely consequence of deregulation. Yet the evidence from overseas completely refutes such a charge, according to a new study by Thomas Gale Moore, professor of economics at Stanford University and senior fellow at the Hoover Institution.
Prof. Moore examined and compared the rates, service levels, and efficiency of trucking in the United States, West Germany, Britain, Belgium, the Netherlands, and Sweden. The first two countries have strict trucking regulation, while the latter four are more or less unregulated. The results were striking. In the United States and West Germany trucking rates are 40 to 50 percent higher than they are in the countries without regulation. Moreover, regulation does not produce better service to small communities; in fact, judging from customer complaints, "regulation has reduced the quality of service provided by the trucking industry, especially to smaller cities and small towns." Moore's data on Britain are especially interesting, since that country had regulated trucking until 1968, but was able to abolish it. Since then, rates have declined, but there has been no noticeable effect on company profits, and the quality of service has remained about the same.
Moore thinks that deregulation of trucking in this country would produce a sharp reduction in rates. "Because rates here are held at much higher levels than they were in Great Britain, the reduction in U.S. rates would probably be sharper," he writes. Thus, the benefits to shippers, and to U.S. consumers generally, would be greater than those in Britain.
SOURCE:
• Trucking Regulation: Lessons from Europe, Thomas Gale Moore, American Enterprise Institute, 1976 (Available from AEI at 1150 17th St., NW, Washington, DC 20036).
ZONING ROLLBACKS
Recent months have seen several successful overthrows of local laws controlling private property rights. In Nebraska the Board of Supervisors of Burt County voted 5-0 to repeal that county's 13-month old zoning ordinance. Angry citizens protesting the imposition of land use controls formed the Preservation of American Private Property Association of Burt County, and obtained the signatures of 95 percent of the population in opposition to the ordinance. This left the Supervisors with little choice but to repeal it. The Burt County group was assisted in their fight by Ray Buker of the Ogle County, Illinois Taxpayers Association, a 14-year-old group which has successfully resisted land use control in their own county.
In other states the action has been in the courts. Last summer the Pennsylvania Supreme Court upheld a lower court decision that found the town of Willistown's zoning ordinance unconstitutional because it provided so little land for multiple-unit construction. A developer's suit resulted in the lower court's decision to overturn the ordinance, followed by the Supreme Court's concurrence. In New Jersey the state Supreme Court ruled last year that all the zoning regulations of suburban Mount Laurel were unconstitutional, because they failed to provide for a range of density levels and building types, including multiple-unit structures. The Mount Laurel decision became the basis for a lower-court ruling in May of this year that Middlesex County must revise its zoning ordinance to provide for more low and moderate-income housing units. Although the basis for some of these decisions may leave something to be desired, the breach in the inviolability of zoning is a welcome development.
SOURCES:
• "Nebraska County Repeals Zoning," AREA Bulletin, May 1976, p. 3.
• "Zoning Laws Being Challenged," Bernard Cohen, AP (New York), May 23, 1976.
HEALTH FREEDOM PROGRESS
The right of individuals to make their own decisions regarding health care issues has received new protection in several recent developments. In April President Ford signed a bill which abolishes the Food and Drug Administration's controls over vitamin and mineral supplement formulations. For the past year the FDA has been operating under new rules which prohibited any combination product in which each ingredient varied by more than 50 percent from the agency's definition of the "recommended daily allowance." The law also empowered the FDA to seize vitamin products whose manufacturers could not prove their health claims. The newly signed law abolishes the controls on product formulations, firmly establishing vitamins and minerals as foods, not drugs. It also puts the burden of proof regarding health claims back on the FDA, rather than on the producers. The new law is expected to lead to increased competition and lower prices in the vitamin business.
Additional freedom of choice would be possible if legislation introduced by Rep. Steve Symms passes Congress. His bill, H.R. 12573, would repeal the "effectiveness" clauses from the 1962 amendments to the Food, Drug, and Cosmetic Act. These are the amendments which have created the "drug lag" in the United States—the withholding of many potentially lifesaving drugs from the market while drug companies comply with costly, bureaucratic testing and documentation requirements (see Trends, March 1976). Dr. Louis Lasagna, head of the Department of Pharmacology and Toxicology at the University of Rochester, recently calculated that two cardiovascular drugs available in Canada but still banned in the United States could be saving 10,000 lives a year in this country if they were available here. Rep. Symms points out that 17,000 Americans died of tuberculosis between 1968 and 1971, while Europeans were being cured by a powerful new drug, rifampin, which had not yet cleared the FDA's approval cycle.
Finally, residents of Alaska recently became the first Americans to have legal access to Laetrile, thanks to passage of H.B. 881, which calls for "freedom of choice for doctor and patient, and their right to mutually agree on medical treatment without interference." The Alaska legislature also passed a resolution calling on the FDA to "stimulate more aggressively research on the effectiveness of Laetrile in cancer therapy." Sen. Hubert Humphrey has seconded the motion by requesting an FDA hearing on Laetrile, "in light of continued favorable comment on its effectiveness by users."
SOURCES:
• "Proxmire Liberates Vitamins," Business Week, Mar. 29, 1976, p. 36.
• "Food Supplements Measure Becomes Law," NHF Newsletter, May 1976.
• "Symms to Give Medical Freedom of Choice Back to Consumers," press release, May 4, 1976.
• "AEI Panelists Examine Federal Drug Regulations," AEI Memorandum, Winter-Spring 1976, p. 5.
•"Alaska First State to Lift Ban on Use of Laetrile," NHF Newsletter, June 1976.
NEW COUNTRY EMERGES
Although unreported by U.S. news media, a new nation declared its independence last December 27: the Na-Griamel Federation. The Federation comprises the northern third of the New Hebrides, a well-known tax haven in the South Pacific. The new government has announced that the tax haven status of the area will not only continue, but be expanded to include the abolition of import and export duties, the only form of taxation previously in existence. The government, headed by President Jimmy Moly Stevens, has extended a welcome to foreign investors and settlers. A number of native-owned land trusts are planning to offer land on a 99-year basis, in hopes of attracting industry to the new country.
Na-Griamel has printed passports and has ordered an initial run of gold and silver coins, but its government has not yet obtained diplomatic recognition from the world community. It sent a delegation to the United Nations in January to present its credentials; the delegates were invited back for the next General Assembly session, which begins in September. The Federation's constitution calls for an extremely limited central government, with no power to tax, and complete separation between government and the economy. It also includes a strong bill of rights.
Na-Griamel presents very interesting possibilities, and REASON will continue to report on developments there.
SOURCE:
• "Na-Griamel Seeks Recognition," The Fiji Times, Jan. 15, 1976.
ADVERTISING PROGRESS
In a major victory for the free market, the U.S. Supreme Court has ruled that purely commercial speech (as in advertising) is entitled to First Amendment protection. The ruling struck down as unconstitutional laws in Virginia and 33 other states that prohibited the advertising of prescription drug prices. In a 7 to 1 ruling, the Court held that such laws violate the First Amendment right of consumers to a "free flow of information." The only dissenter was Justice William Rehnquist, who argued that the decision "elevates commercial intercourse between a seller hawking his wares and a buyer seeking to strike a bargain to the same plane as has been previously reserved for the free marketplace of ideas." (That, of course, is just the point! —Ed.)
The Court's ruling was so sweeping that one of the attorneys who had filed the Virginia case predicted that it would also lead to invalidation of state laws prohibiting price advertising of eyeglasses and funeral services. Unfortunately, Justice Blackmun, who wrote the majority opinion, noted in a footnote that the ruling would not necessarily extend so far as to doctors and lawyers.
Lawyers in California, meanwhile, are taking small steps of their own in the direction of advertising their services. The State Bar Board of Governors in May approved a liberalization of rules governing lawyer advertising. It expands the type of information that can be listed in directories (including the Yellow Pages) to include areas of specialization and certain basic information about fees. But the policy still excludes radio, television, and newspaper display ads. State Sen. David A. Roberti has meanwhile introduced legislation removing legal prohibitions on all lawyer advertising. In addition, the San Diego Bar Association has set up an experimental Lawyer Referral Service, which itself is advertising via newspapers and billboards. The service charges $10 for an initial consultation to help people decide what kind of legal assistance they need. Some 550 of the county bar's 2,350 members are participating in the experiment.
SOURCES:
• "High Court Voids Ban on Prices in Drug Ads," Los Angeles Times, May 25, 1976.
• "State Bar OK's Plan to Broaden Ads by Lawyers," Ibid., May 15, 1976.
• "San Diego Residents Benefiting from Advertising by Attorneys," UPI (San Diego), June 1, 1976.
MILESTONES
Cities. A degree of fiscal sanity is at last being forced upon the New York City government by its ongoing fiscal crisis. The latest evidence is the June decision by the City University of New York to charge its students tuition, rather than soaking the city taxpayers for this expense. Although the tuition ($750 for freshmen and sophomores, $900 for juniors and seniors) will cover only a portion of the costs, it's a giant step in the right direction, i.e., of users rather than all taxpayers paying for the services they receive from government. (Source: "Governors of City University in N.Y. Impose Tuition," AP (New York), June 2, 1976.)
Health Care. The liberal consensus on the need for massive new government health care programs (such as compulsory National Health Insurance) continues to disintegrate. The latest defector is the editor of Science, Philip H. Abelson. In a recent editorial Abelson pointed out that the massive increases in health care expenditures over the past two decades have failed to increase the life expectancy of Americans, and that the most important improvements in health and longevity could be brought about by "good nutrition, weight control, abstention from excessive drinking of alcohol and from cigarettes, and getting enough exercise and sleep." That's not much of a rationale for multibillion dollar Federal programs, but it's a refreshing acknowledgment of reality. (Source: "Cost-Effective Health Care," Philip H. Abelson, Science, May 14, 1976.)
Mail. "Use commercial small-parcel carriers as a cheaper alternative to priority mail and U.S. Postal Service-insured parcels." So reads one of 10 cost-saving suggestions from the Federal government's own General Services Administration, in a bulletin circulated to Federal agencies. The bulletin pointed out that since 1972, the government's mailing costs have gone up by 72 percent. "The magnitude and dollar amount of these increases make it imperative for all agencies to examine their mail practices and effect economies," the GSA recommended. (Source: "U.S. Urging Agencies to Use Private Mail Firms," AP (Washington), May 22, 1976.)
Deregulation. Two all-cargo airline chairmen have come out in favor of deregulation of cargo carriers, as proposed by the CAB in April. In testimony before the House Public Works and Transportation Committee, the chairmen of Federal Express and Flying Tiger Line supported open competition and removal of CAB restrictions on equipment, routes, and operating practices. The chairman of another cargo line, Trans International Airlines, also testified in favor of regulatory reform, but not complete deregulation. (Source: "Two Cargo Carriers Back Deregulation," Aviation Week, May 3, 1976, p. 27.)