WEBVTT NOTE 6. Obama on Auto-Defrosting Refrigerators 1 00:00:00.000 --> 00:00:05.440 Obama, on auto-defrosting refrigerators. 2 00:00:05.440 --> 00:00:09.200 I'm the guy who just last week managed to find a plumber who would increase the water 3 00:00:09.200 --> 00:00:14.460 pressure in my entire house, defying government controls and thereby causing all appliances 4 00:00:14.460 --> 00:00:16.040 to work better. 5 00:00:16.040 --> 00:00:19.640 It's not surprising that this was necessary. 6 00:00:19.640 --> 00:00:24.440 Government regulations have made a mess of our daily lives. 7 00:00:24.440 --> 00:00:29.560 Whether it is banning effective products or mandating inferior functionality in our appliances 8 00:00:29.560 --> 00:00:38.080 and Fictures, government's role here is indisputably to degrade our quality of life. 9 00:00:38.080 --> 00:00:44.000 So I was stunned to hear President Obama claim exactly the opposite in a speech to the US 10 00:00:44.000 --> 00:00:46.000 Chamber of Commerce. 11 00:00:46.000 --> 00:00:49.840 He ridiculed those who predicted disaster from government regulations as far back as 12 00:00:49.840 --> 00:00:50.840 1848. 13 00:00:50.840 --> 00:00:55.880 It didn't happen, he said, none of these things came to pass. 14 00:00:55.880 --> 00:01:00.920 Then he went further to say that government regulations enhanced industry and made our 15 00:01:00.920 --> 00:01:03.240 lives better. 16 00:01:03.240 --> 00:01:07.840 Regulations often spark competition and innovation. 17 00:01:07.840 --> 00:01:13.640 What immediately came to mind is a picture of a race in which some overlord is clamping 18 00:01:13.640 --> 00:01:16.320 shackles on the runner's feet. 19 00:01:16.320 --> 00:01:21.440 Now that does not stop the race, the runners develop innovative ways to keep going, nor 20 00:01:21.440 --> 00:01:23.200 does competition stop. 21 00:01:23.200 --> 00:01:27.400 It might even become more intense as runners develop new skills they would otherwise not 22 00:01:27.400 --> 00:01:28.880 need. 23 00:01:28.880 --> 00:01:33.400 All that's true, and yet we wouldn't look to this race as the one that is going to set 24 00:01:33.400 --> 00:01:36.000 new speed records. 25 00:01:36.000 --> 00:01:40.960 Everyone would be better off without shackles. 26 00:01:40.960 --> 00:01:45.400 But Obama's claim really goes further than saying that somehow industry overcame the 27 00:01:45.400 --> 00:01:47.400 costs of regulation. 28 00:01:47.400 --> 00:01:53.880 He suggested that we are actually better off than we would otherwise be due to regulations. 29 00:01:53.880 --> 00:01:58.720 And he gave the specific example of automatically defrosting freezers. 30 00:01:58.720 --> 00:02:00.480 He really did. 31 00:02:00.480 --> 00:02:04.160 Here is the statement. 32 00:02:04.160 --> 00:02:08.000 The government set modest targets a couple of decades ago to start increasing efficiency 33 00:02:08.000 --> 00:02:09.440 over time. 34 00:02:09.440 --> 00:02:12.440 They were well thought through, they weren't radical. 35 00:02:12.440 --> 00:02:16.040 Companies competed to hit these markers, and they hit them every time, and then exceeded 36 00:02:16.040 --> 00:02:17.040 them. 37 00:02:17.040 --> 00:02:42.600 Thanks to many commentators on the Mises blog and the LVMI's Facebook page who did some 38 00:02:42.600 --> 00:02:45.960 extensive sleuthing, here is what we found. 39 00:02:47.040 --> 00:02:53.900 In 1928, the U.S. Patent Office issued a patent for defrosting of the cooling element or unit 40 00:02:53.900 --> 00:02:56.120 of a refrigerating system. 41 00:02:56.120 --> 00:02:59.720 Still, invention is one thing and marketing and production is another. 42 00:02:59.720 --> 00:03:04.680 It took a very long time for these to be seen in real life. 43 00:03:04.680 --> 00:03:09.640 More and more patents were issued all throughout the 1920s and 1930s. 44 00:03:09.640 --> 00:03:13.840 Most likely, the innovations occurred before this time and would have sped more quickly 45 00:03:13.840 --> 00:03:28.240 Auto-Defrost, a recently developed electronic circuit for automatically controlling water 46 00:03:28.240 --> 00:03:32.620 defrosting of refrigeration coils has been announced by the Bush manufacturing company 47 00:03:32.620 --> 00:03:37.220 Hartford, founded 1907, Connecticut. 48 00:03:37.220 --> 00:03:41.200 Advantages claimed for this device are its low price, its ease of installation on existing 49 00:03:41.200 --> 00:03:47.600 Inventing water defrost systems, and it works independently from the refrigeration system. 50 00:03:47.600 --> 00:03:52.640 Recall that Obama spoke of how the relevant regulations came about a couple of decades 51 00:03:52.640 --> 00:03:53.640 ago. 52 00:03:53.640 --> 00:03:58.160 Well, his timing is off by some 63 years. 53 00:03:58.160 --> 00:04:03.560 What's more, these items were already reaching a retail market by 1948. 54 00:04:03.560 --> 00:04:11.160 A March 13, 1948 edition of the billboard posted a story dateline from Oakland, California. 55 00:04:11.160 --> 00:04:14.940 Food Omad Inc. of this city is readying a new ice-cream vending machine designed for 56 00:04:14.940 --> 00:04:18.720 grocery stores, supermarkets and department stores. 57 00:04:18.720 --> 00:04:22.400 Dispenser will be offered both as a coin-operated and a manual device. 58 00:04:22.400 --> 00:04:26.520 The vendor will hold up to six flavors and its makers claim that it has an automatic 59 00:04:26.520 --> 00:04:28.860 defroster. 60 00:04:28.860 --> 00:04:34.480 By 1951, these items were already being pushed in homes. 61 00:04:34.480 --> 00:04:37.960 An advertisement in Popular Science reads as follows. 62 00:04:37.960 --> 00:05:07.960 Von Schrader Manufacturing Co., amazing attachment, makes old refrigerators into modern automatic defrosters, 30 million prospects, sell without selling pressure on sensational free trial plan, just plug it in and leave it, frees women from drudgery and massive defrosting, saves electricity, keeps food longer, better, gives longer life to refrigerator, women buying by the thousands! 63 00:05:07.960 --> 00:05:08.960 Old News 64 00:05:08.960 --> 00:05:15.000 An advertisement in Life magazine from 1958, this time from Westinghouse, references a 65 00:05:15.000 --> 00:05:21.400 frost-free auto-defrost refrigerator, as if it was nearly a standard feature. 66 00:05:21.400 --> 00:05:28.040 The main pitch here is that the refrigerator has cold injector that chills food faster. 67 00:05:28.040 --> 00:05:32.920 It is also styled in the shape of tomorrow. 68 00:05:32.920 --> 00:05:36.400 Now this is interesting to me, since I can remember problems with freezers in my own 69 00:05:36.400 --> 00:05:37.400 lifetime. 70 00:05:37.400 --> 00:05:42.480 So it is not automatically crazy to believe that something happened in the regulatory environment 71 00:05:42.480 --> 00:05:49.920 of the early 1970s that would have prompted the universalization of frost-free freezers. 72 00:05:49.920 --> 00:05:55.240 During this period, there began a government push for energy efficiency, and makers were 73 00:05:55.240 --> 00:06:00.520 required by governments to meet certain targets, just as the President says. 74 00:06:00.520 --> 00:06:03.760 But there is a serious problem. 75 00:06:03.760 --> 00:06:09.860 An automatic defroster increases, not decreases, the overall energy use of refrigerators and 76 00:06:09.860 --> 00:06:11.580 freezers. 77 00:06:11.580 --> 00:06:19.200 As this government report said in 1998, refrigerators with automatic defrost have higher occupant 78 00:06:19.200 --> 00:06:26.100 consumption on a label-normalized basis per unit of occupant activity than refrigerators 79 00:06:26.100 --> 00:06:29.220 with manual defrost. 80 00:06:29.220 --> 00:06:33.580 In other words, the more straightforward way to meet regulations would have been to take 81 00:06:33.580 --> 00:06:37.820 defrosting devices out, not put them in. 82 00:06:37.820 --> 00:06:44.060 The devices therefore exist not because of standards, but in spite of them. 83 00:06:44.060 --> 00:06:49.620 All evidence suggests that the truth is precisely the opposite of what Obama claimed. 84 00:06:49.620 --> 00:06:53.820 Frost-free freezers came about in the normal market way. 85 00:06:53.820 --> 00:06:58.460 A company found a way to package it as a luxury good available in some markets, another company 86 00:06:58.460 --> 00:07:03.140 Many saw the advance and emulated it, offering it to still other markets, though the process 87 00:07:03.140 --> 00:07:07.580 was likely slowed by the government regulation called the patent. 88 00:07:07.580 --> 00:07:11.500 Other companies saw the potential for solving a monstrous household problem and began making 89 00:07:11.500 --> 00:07:16.420 them more cheaply and more efficiently, as the target market gradually went from luxury 90 00:07:16.420 --> 00:07:18.540 to mainstream. 91 00:07:18.540 --> 00:07:23.480 Over time, the improved product was ubiquitous. 92 00:07:23.480 --> 00:07:28.340 This is pretty much the story of every innovation in the history of the world. 93 00:07:28.340 --> 00:07:32.800 Whether it is the spinning wheel or the smartphone, private companies innovate in order to outdo 94 00:07:32.800 --> 00:07:35.660 their competitors in serving the consumer. 95 00:07:35.660 --> 00:07:39.620 They all have reason to become ever more excellent in the service of others. 96 00:07:39.620 --> 00:07:45.960 They learn from each other and improve on what exists, in the absence of patents. 97 00:07:45.960 --> 00:07:52.260 It is hard to imagine the alternative scenario that inhabits Obama's mind. 98 00:07:52.260 --> 00:07:56.080 It goes something like this. 99 00:07:56.080 --> 00:08:00.740 Private enterprise comes up with a technology that it can fob off on customers and people 100 00:08:00.740 --> 00:08:04.020 like it fine, but for some maddening problem. 101 00:08:04.020 --> 00:08:09.400 Private enterprise doesn't care, so long as the profits are there, the problems persist. 102 00:08:09.400 --> 00:08:13.120 No one in the private sector has reason to change anything. 103 00:08:13.120 --> 00:08:16.240 Stasis prevails. 104 00:08:16.240 --> 00:08:20.520 Government regulators, who are constantly scouring around consumer markets to find ways 105 00:08:20.520 --> 00:08:25.300 to innovate and improve products, notice the problem and issue some mandate. 106 00:08:25.300 --> 00:08:37.660 Listen up! Our citizens have a problem with their freezers. They are building up ice. 107 00:08:37.660 --> 00:08:43.980 We want you to find a way, some way, to fix this problem. You have until next winter to 108 00:08:43.980 --> 00:08:50.100 figure it out. If you do not, you are dead meat. 109 00:08:50.100 --> 00:08:53.960 Industry complies under the gun, scrambling to improve products only because some government 110 00:08:53.960 --> 00:08:56.560 bureaucrats demanded. 111 00:08:56.560 --> 00:09:02.440 Under government edict, enterprise makes the thing and problems go away. 112 00:09:02.440 --> 00:09:07.240 This process is repeated for thing after thing, and we are gradually made better off, thanks 113 00:09:07.240 --> 00:09:12.620 to the central planners and wise public servants who know better than everyone else. 114 00:09:12.620 --> 00:09:19.560 Under this model, the entire developing world might be improved in a matter of months. 115 00:09:19.560 --> 00:09:24.800 This is, of course, sheer fantasy. 116 00:09:24.800 --> 00:09:29.080 So is the claim of Obama that we should be grateful to regulators for all the blessings 117 00:09:29.080 --> 00:09:30.740 that flow to us. 118 00:09:30.740 --> 00:09:35.040 How many iPhone apps have bureaucrats invented? 119 00:09:35.040 --> 00:09:39.840 Will the President's next claim be that bureaucrats gave us the we?