Henry Waxman's Knowledge Problem

I recently wrote about Henry Waxman's evident dismay that companies would deign to explain the downside of Obamacare so soon. Glenn Reynolds, the U. of Tennessee law professor who runs Instapundit, picks up the same ball, runs with it, and notices that the ball has the signature of Hayek:

In his "The Use of Knowledge In Society," Hayek explained that information about supply and demand, scarcity and abundance, wants and needs exists in no single place in any economy. The economy is simply too large and complicated for such information to be gathered together.

Any economic planner who attempts to do so will wind up hopelessly uninformed and behind the times, reacting to economic changes in a clumsy, too-late fashion and then being forced to react again to fix the problems that the previous mistakes created, leading to new problems, and so on.

As Reynolds explains, this is what is known as "The Knowledge Problem." And no matter how smart Henry Waxman may think he is, he can't get past it. Reynolds explains why:

Waxman and his colleagues in Congress can't possibly understand the health care market well enough to fix it. But what's more striking is that Waxman's outraged reaction revealed that they don't even understand their own area of responsibility - regulation -- well enough to predict the effect of changes in legislation.

In drafting the Obamacare bill they tried to time things for maximum political advantage, only to be tripped up by the complexities of the regulatory environment they had already created. It's like a second-order Knowledge Problem.

As Reynolds points out, the U.S. Code is unbelievably complex (over 50,000 pages long) and its tentacles stretch into nearly every facet of life in this country, at least potentially. I could, and probably do, go about my normal business in a day and violate a half dozen regulations without even realizing it. Chances are you do, too. It's quite likely that even Waxman runs afoul of a few. We are a nation of scofflaws.

The good news? At this point there's no appetite for creating the enforcement apparatus large enough to cover all the nooks and crannies of the U.S. Code. Obamacare calls for the addition of up to 16,000 new IRS agents to enforce its dizzying number of dictates. That's a lot of force, but it almost surely won't be enough muscle to make everyone comply with everything. And the pushback has already begun.

The bad news: Henry Waxman remains free to keep piling on the regulations because he runs for office from an utterly safe congressional district and no one can really hold him accountable. And because the regulations he and his pals promulgate do have the force of law, it's always possible that some regulatory agency with police powers will eventually catch up with us. It's not quite right to say that such things are arbitrary, but they are capricious. And if you embarrass Henry Waxman, he can make life very difficult for you.

Things work best when people understand and accept the rules of engagement. I don't have time to digest the U.S. Code. Neither do you, nor does Henry Waxman. Our task, it seems to me, is to make the rules easier to understand and to follow.