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Explode the Liberal Myth of the "Evil Businessman" Liberals love to tell us that GOVERNMENT must interfere in the free market to protect us from greedy corporations. In fact, the competition of an unregulated market is the most effective way possible to create incentives for honesty and obedience to moral rules. Here's an example: Suppose there are two companies, A and B, and each has one employee. Company A's employee is dishonest, and regularly carries home Company A's property for his personal use. Company B's employee is honest. Other things equal, Company A will not be able to produce at as low a cost as Company B. The more competition these firms' face in their industry, the less likely Company A will stay in business, and Employee A will stay employed. On the consumer side, consider two companies A and B that each produce consumer goods. Company A uses cheap materials and always tries to charge a dollar more than its competitors. Company B uses quality materials and tries to attract customers by underpricing the competition. How long will the low-quality, high-priced firm stay in business? The answer depends on government regulation. The more government restricts competition, the greater the likelihood Company A will be able to stay in business. And, of course, unscrupulous businessmen have every incentive to try to purchase government restrictions from politicians who think they have the power to enact them. Tools that governments use to restrict competition include: Licensing: An issue during the L.A. mayor's race a few years ago was that the city required some businesses to obtain as many as 80 different permits before they could set up shop. By acting as a barrier to entry, licensing requirements raise prices and limit the quantity of goods and services available for consumers. Just as not everyone buys a Ferari, not everyone needs a lawyer who can pass the toughest bar exam in the nation, but if you live in New York, the state with the toughest bar exam, your government has taken away your freedom to select the cheaper quality of lawyer available in the other 49 states. Licensing hurts consumers the most who would be likely to buy lower quality - the poor. Inspection and information production requirements: Producing information is a legitimate function of government, but almost every inspection requirement in U.S. law was enacted as a barrier to keep out competition, and most information production requirements do not increase the information the market already provides. For example, U.S.D.A. meat inspections were enacted not to improve public health but to protect large meat packers at the turn of the century (1900) from small start-up competitors. The Securities Acts of the 1930's did not require a single piece of information that companies were not already making publicly available. Inspection and information production requirements also create opportunities for arbitrary enforcement - just ask the Naval Officer who was singled out for code enforcement by Norfolk's housing inspectors because they thought he'd be likely to comply and could serve as a precedent to coerce less cooperative citizens. Mandated benefits and minimum wages: Aren't you glad we have whole armies of civil servants whose only function is to put people out of work because someone else doesn't like the rate of pay the people agreed to work for? These laws assume people who voluntarily take a job are too stupid to find the highest-paying job possible. And the biggie: Taxes. Companies don't pay taxes - PEOPLE do! Yet liberals have actually sold us on forcing retirees and grandparents - the people who own the most stock in American companies - to pay taxes twice, once on the profit earned by the companies they own and a second time when those profits are paid to them as dividends. The free market works because it pits the self interest of each of us against that of everyone else - just exactly what the Founders had in mind when they divided the power of government horizontally between branches and vertically between the federal government and the states. It is no accident that liberals - who are always trying to destroy the barriers that separate governmental powers - also try their best to eliminate competition in business. Both tactics help liberals feed their own greed and lust for power. The real tragedy is that so many of us fail to realize that the regulations that are supposed to "help" us actually destroy the only thing that can keep men who do not believe in God honest: competition from their fellows. |
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