Adam Smith Institute

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The problem with over arching regulation is that it concentrates error

Yet another example of why market competition beats bureaucratic regulation. For if we have such competition then some certain amount of the people doing it are going to be wrong. Wrong in what they're doing it, how they're doing it, what they think people want to have done - the very fact that many people are doing it in many different manners is simple enough proof of that.

True, there's always the possibility that different people want different things done in different ways but we mean something more basic here, before we get to that stage. And thus we could indeed ponder the idea that if all the clever people just told us what to do then we'd avoid the waste of that competition and that wrongness.

Except it doesn't actually work that way:

Sir James Dyson has won a shock victory in the European courts over Brussels rules which the company says unfairly penalised its vacuum cleaners.

An appeal in the European Court of Justice said a previous ruling from a lower court against Dyson had “distorted the facts” and “erred in law”.

The EU decided that vacuum cleaners should be tested for their energy efficiency. They then went on to determine how they should be so tested.

The billionaire entrepreneur argued that the tests are only relevant to vacuums with their dust bags empty and do not cover them when they are full, as they would typically be in normal use. A full vacuum would typically use more energy.

Dyson’s vacuums use a “cyclonic” design without a bag to collect dust and the company argued that the tests used by the EU unfairly disadvantaged its products.

Two years ago the company argued in the European general court that there was a way of testing conventional vacuums when the bag was full, so a comparison could be drawn between the two designs.

The European Court of Justice today upheld parts of Dyson’s appeal, backing the company’s claims that tests are available to measure a vacuum’s performance when full.

It also backed the British company’s by saying tests should “measure the performance of vacuum cleaners in conditions as close as possible to actual conditions of use”.

That there is error in a system is one of those unfortunate truths about any system containing human beings. What we want therefore is a system which sorts through the errors as fast as possible and eliminates them.

Which is really what a market does for us, it's an experimentation machine. This works, that doesn't, this does but no one wants it, nope, they want this but it's currently impossible and so on. Bureaucratic regulation simply concentrates the error. The entire continent of Europe has had the energy performance of vacuum cleaners wrongly reported to it for years now precisely and exactly because we used the bureaucratic method of determining the rules by which we do so.

We'd all be much better served by Which? and the equivalents across Europe devising their own standards and that way we'd be able, through that terribly wasteful market trial and error, be able to zero in on the testing standard that was actually useful.