The Government that Cried Wolf

June 17, 2013

In California, Proposition 65, passed by the voters in 1986, requires sellers to put warning labels on goods that contain chemicals that can cause cancer, birth defects or other reproductive harm. Many products sold in California carry labels warning of this harm, even if the risk is tiny. Many people dismiss governmental warnings because the government often "cries wolf" when it comes to safety in products, says David R. Henderson, a research fellow at the Hoover Institution.

California supermarkets post generic "Proposition 65 Warnings." These warnings are generally posted at the entrance to a store. Most people have learned to tune out the Proposition 65 warnings. That particular law has some costly, unintended, but totally predictable consequences.

  • One is that certain vendors will not sell to the California market.
  • Another is that vendors have to put on the package a Proposition 65 warning that could easily scare off customers in the other 49 states.
  • In addition, the vendor will have accrued added costs that hike the price of the product, therefore making it less competitive in the market.

Aside from the economic costs of Proposition 65, it demonstrates a common theme: unless it immediately affects them, people tune out governmental warnings because the government warns about such miniscule things that will probably never affect them. For example, the federal government constantly warns about the dangers of terrorism, but death by a terrorist is a very low-probability event for any individual American.

If the government were more judicious with its warnings and tried to focus on the high-probability dangers (and this is what governments do in many other countries) lives would be saved. Human life is simply too valuable to endanger it by incessantly warning people about small risks.

Source: David R. Henderson, "When Government Cries Wolf," Hoover Institution, June 7, 2013.

 

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