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Poland Spring and the perils of the regulatory state

Summary:
Somethings do indeed need regulating--other can be regulated but should not be. The difficulty of course is in deciding which must be and which should not be. A general rule of thumb coming from game theory.We humans are pretty good at dealing with all those things like the prisoners' dilemma if they come in games of multiple iterations. The ultimatum game, for example, the explanation of why people will punish "unfair" distributions comes from the manner in which life itself is indeed a series of multiple interactions. Perhaps these days with different people, but in the core of what created humans with he same small group over the years. That is, we train people to be fair through punishing them when they are not--a process that only works if we're with those multiple iterations.  From

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Somethings do indeed need regulating--other can be regulated but should not be. The difficulty of course is in deciding which must be and which should not be. A general rule of thumb coming from game theory.

We humans are pretty good at dealing with all those things like the prisoners' dilemma if they come in games of multiple iterations. The ultimatum game, for example, the explanation of why people will punish "unfair" distributions comes from the manner in which life itself is indeed a series of multiple interactions. Perhaps these days with different people, but in the core of what created humans with he same small group over the years. That is, we train people to be fair through punishing them when they are not--a process that only works if we're with those multiple iterations.  

From this we can extract our rules about regulation. Where the decision to purchase, say, is something done multiple times with many choices we can leave regulation to the market. Flavours of toothpaste for example, we do not need to define what such may be made. Consumer pressure will regulate matters just fine. Something which is done once or twice in a lifetime, the purchase of a pension, or a mortgage, will probably require more oversight.

At which point the claims against Poland Spring water:

Eleven consumers filed a class action lawsuit this week against Nestlé Waters North America, Inc., alleging the company's Poland Spring Bottled Water is "a colossal fraud."

...

The group argues Poland Spring water has been "a colossal fraud perpetuated against American consumers" since it was first bottled in 1993. They claim that "not one drop" of the water complies with the Food and Drug Administration's definition of what constitutes spring water, and instead is ground water.

No, we don't know either. But we do have the regulation of what is spring water, the one that must be met:

The name of water derived from an underground formation from which water flows naturally to the surface of the earth may be “spring water.” Spring water shall be collected only at the spring or through a bore hole tapping the underground formation feeding the spring. There shall be a natural force causing the water to flow to the surface through a natural orifice. The location of the spring shall be identified. Spring water collected with the use of an external force shall be from the same underground stratum as the spring, as shown by a measurable hydraulic connection using a hydrogeologically valid method between the bore hole and the natural spring, and shall have all the physical properties, before treatment, and be of the same composition and quality, as the water that flows naturally to the surface of the earth. If spring water is collected with the use of an external force, water must continue to flow naturally to the surface of the earth through the spring's natural orifice. Plants shall demonstrate, on request, to appropriate regulatory officials, using a hydrogeologically valid method, that an appropriate hydraulic connection exists between the natural orifice of the spring and the bore hole.

We would assume that since these are the regulations then Nestle meets them although obviously, given the suit, perhaps not. Our point though would be that this isn't something that requires such regulation. Bottled water is a many times purchase, something that can thus be left to consumer pressure to regulate.

It's water. In a bottle. Want some?

That would seem to cover it for us.

Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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