George Leef’s latest Forbes column examines new research into the effectiveness of mandated disclosure laws.
Having information is good, right? Information helps people make good decisions, so it’s obvious that laws mandating disclosure of information must be a benefit to the public.
That’s the logic behind many laws and regulations anyway. And like the logic behind many laws, it’s mistaken. So say professors Omri Ben-Shahar (University of Chicago) and Carl Schneider (University of Michigan) in their recent book More Than You Wanted to Know: The Failure of Mandated Disclosure, published in April by Princeton.
Think about those tedious documents you so often have to sign before you can get something you want – they are the subject of this book. And while such documents are as boring as anything can be, the book is engaging, witty, and above all powerfully argued.
The villains of the book are the Disclosurites. Disclosurites is the term that the authors have coined for those who are responsible for putting us in the “kudzu-like” grip of information mandates. The Disclosurites are the contemporary policy wonks and politicians who insist that Americans must be given voluminous amounts of information prior to making decisions so that those decisions will be “fully informed.”
Mandated disclosure is not merely a failure because it seldom helps anyone make a better choice, but it can even be counterproductive. With so much information cascading down on them, consumers, patients, and others may miss the information that would actually matter to them.
Nevertheless, for politicians across the ideological spectrum, mandated disclosure is an easy way to appear to be engaged in solving society’s problems. Republicans can claim that more information helps markets work better and Democrats can claim that disclosures help protect “the little guy.” Therefore the mandates keep accumulating.
