“Any law that makes it legal for the government to do what would be a crime for an individual to do should be stricken from the books”.
“The real cost of the State is the prosperity we do not see, the jobs that don’t exist, the technologies to which we do not have access, the businesses that do not come into existence, the the bright future that is stolen from us. The State has looted us just as surely as a robber who enters our home at night and steals all that we love”. –Frederick Bastiat
There is no perfect system whereby injustices have been eradicated. In an unregulated environment, nefarious actors will violate customers’ rights. This is what the courts are for. Eventually, reputation catches up with immoral actors, and they fall to competition. An unregulated environment is self-correcting. The only dynamic that can protect corrupt actors in business is protection by the government. The government can only cover these companies if it has a hand in business through licensing and regulations. In a free market, the bad actors eventually fail; in a regulated economy, the corrupt eventually gain a stranglehold on their industry.
Though no system eliminates injustices, the system that comes with the most injustice is one with regulation and licensing. In time, the large businesses partner with the government to regulate the industry and squeeze out the smaller competitors. This denies others their right to pursue happiness and compete, resulting in a two-tier society of “haves” and “have-nots.”
A “mixed economy” is nothing but the early stages of a regulated economy. The mixed economy is mostly capitalistic yet allows some aspects of the economy to be regulated. This can only occur when the people accept the premise that the government can regulate a (reasonable) portion of the economy. The downside is that it will be expanded once this premise is accepted. The only way to keep the proverbial “Camel” from getting its nose under the tent is never to allow the federal government to regulate any aspect of business. Since regulation violates property rights, and the government was established to secure our rights, not violate them, any regulation should be seen as a power unable to be bestowed upon the federal government. A constitutional republic (states’ rights and dual sovereignty) is the only self-regulating system that corrects the ills of bad policies by a single state through competition by competing states instituting better policies.
Regulation often destroys innovation for the sake of those who control wealth they did not create. When someone inherits, buys, or is hired/promoted to lead a business they didn’t build, they usually lack the skills necessary to keep it profitable unless they partner with the government to provide protection. These “leaders” lobby legislators for regulations to “protect the consumers.” These regulations deny current and future generations of innovation by squeezing out smaller and newer competitors, which are gaining (or could gain) market share through innovation.
Licensing as extortion
Requiring a business owner or professional to pay a license fee should also come with a significant benefit worth the charge. If the only benefit you receive from a license is that you don’t get fined or shut down, then you are only paying protection money from the person who vows to hurt you if you don’t pay. The right to pursue happiness involves the right to build a business without being extorted. If the license were optional and people chose not to get it, it would have no place in entrepreneurs’ lives. In an unregulated industry, private industry organizations develop to ensure standards. Joining a professional organization is a choice the business owner can make. A Realtor doesn’t need to join the National Association of Realtors, but joining comes with significant benefits, and customers know that their Realtor subscribes to the organization’s ethics. Best of all, the government doesn’t have a hand in or control the industry. Our government was created to secure our rights, not infringe them. Licensing and charging for a right is to deny the right. Licensing is extortion when forced upon you, and you don’t receive benefits worth the charge. You are also deprived of your pursuit of happiness when you have to ask permission to build a business.
A free market respects the values of all. Controlled markets abuse one side while protecting another, i.e., sellers often want to do as little as possible for as much as possible, and buyers want to demand as much for as little as possible. When the market is free, the natural balance is achieved by both sides reaching a fair agreement. When controls are in place, one side will get a better deal than they would have settled for, and one side will get less. Free markets find the natural balance between the two sides. Anything else leaves someone getting the short end of the stick. It is a betrayal of public trust for the government to intervene and play favorites; they have a fiduciary responsibility to protect the rights of all people, not some.
Price Gouging
People who don’t own or run businesses are easily convinced that the government should regulate prices. In emergencies and disasters, sellers of goods may need to raise prices quickly yet are accused of “price gouging.” Some states even have laws against this undefinable “crime,” which come with severe financial penalties for selling above a price that a bureaucrat arbitrarily deems excessive. We have seen this many times with gas prices, giving us a perfect example of how price controls destroy businesses. Remember that a person’s business is their property, which they use to pursue their happiness, both “protected” by the Constitution.
In the event of a natural disaster, a hurricane being a great example, the people want to fill all their tanks due to a fear of a looming shortage. This surge in demand will empty the reserves of local gas stations in short order. This shortage causes a ripple effect across the supply chain. Shipping companies need more personnel to fulfill demand, resulting in delays immediately. The shipping companies must offer higher pay to attract more help. Higher shipping costs result in higher costs to the retailer. Gas suppliers must divert resources to the affected area, resulting in lower supply in unaffected regions, again increasing prices when demand exceeds supply. Gas producers may have to hire more help, pay overtime, hire additional shipping companies they don’t have a standing contract with, or pay expedited shipping costs, all of which raise the cost of the next shipment. These ripple effects increase the cost of the next shipment to the retailer. If a station’s gas sold at $2.50/gallon, providing the profit necessary to purchase their last order, they may need to charge $3.50/gallon immediately to have the funds to re-supply.
Consumers and bureaucrats think, “Well, you bought this gas before the shortage, so if you charge more than normal for this gas, you are ripping us off.” The business owner knows they must sell the product to create the profit necessary for the following order. If the government orders the business to sell at prior rates, the business can go out of business due to a lack of cash flow. A business that has existed for decades can be bankrupted in short order by a politician who either doesn’t understand the business or doesn’t care. If they have never built a business, they are likely incompetent. They are putting political profit over national prosperity if they don’t care.
Every supply chain has many nodes between the original material suppliers to the end customers. Every node comes with its challenges and problems which require immediate solutions. Only those with proper experience and knowledge are competent at solving issues arising at each specific node and doing so in real-time, keeping things flowing correctly and efficiently.
No one person has the knowledge, skills, or awareness to know or solve all problems as they arise. Only many people making independent decisions can keep a supply chain flowing smoothly. Any infringement on the rights of the companies to make their own decisions results in a lesser outcome. The government can’t make business better; it can only impede. A government can only help a business by hurting its competitors. A government of, by, and for the people is betraying some citizens by enacting business controls.
To have politicians who serve the people, we must remove all the financial benefits of control. Any control of business gives politicians the ability to get wealthy by crushing companies. Any control is an infringement of property rights and the pursuit of happiness. Regarding price gouging, only those paying the bills should decide what to charge; customers can buy elsewhere if they ask too much. That is freedom for all and a free market.
Auto Safety
The auto industry is a perfect example of how regulations limit competition and innovation. The cost to develop a new car compliant with all the laws is in the millions. Older cars can only be produced if they conform to modern standards. Continually adding regulations further limits the number of manufacturers capable of making cars, again squeezing out the competition. Below are just a few areas covered by existing laws and subjects of proposed regulations.
Existing laws
-Fuel economy standards
-Roof crush
-Child Restraints
-Seat Belts
-Theft protection
-Rollaway protection
-Tire pressure
-Tire tread
-Airbags
-Ejection mitigation
-Crumple zones
Proposed laws
-Record keeping and retention
-Windows, partitions, and roofs
-Side impact protection
-Rearview mirrors
-Fuel system
-Electronic stability control
-Event data recorders
While auto manufacturers must comply with all the laws to make cars “reasonably safe,” a 16-year-old with a license can legally drive a 1200cc street bike. The cost of producing cars today has increased to a level where most people need financing to obtain a vehicle, and their auto loan is one of their highest expenses. The people should be free to engage in implied risk by purchasing a less safe and expensive vehicle. Many classic cars can be produced today for a fraction of what a modern car costs, and there is an enormous market for such vehicles. If people were allowed to build and sell a brand-new ’69 Camaro or Mustang, or perhaps a rat rod or Shelby Cobra, we would see many of them on the roads today. People in small towns would invent new, less expensive cars, and the best ones would sell very well.
If regulations were removed, the large companies would lose market share and could be put out of business by companies on the rise. Unfortunately, the average person is denied the ability to compete, and customers are denied cheaper options and new innovations, all to preserve the market position of the large companies that lobby for these regulations. We all know that the right to pursue happiness is enumerated in the Constitution, but how often have you seen lawsuits on the issue? The right to compete in business is the right to pursue happiness.
Individual rights trump the Commerce Clause because our government was established to secure our rights. It may be time to bring lawsuits over the pursuit of happiness to the Supreme Court and get some case law set. A “right to compete in business” amendment would also be a significant agenda item.