« Climate of Fear Part 13 | Main | Watch Out For Social Security »
January 21, 2005
Cartels
I really do not like government sponsored cartels. I can understand the need for licensing and regulation in some industries, but the licensing requirements and regulations need to be reasonable and actually deal with the items or services being sold and should allow for as much consumer freedom as possible. I used to have a license to sell securities, which are complex to understand and there is a history of fraud associated with selling them so I thought my license (which included a rather hard test and criminal background check) was reasonable. For other jobs like professional engineers and doctors it makes sense to have some reasonable license requirements. Mostly you here about cartel horror stories from conservatives, which is surprising since cartels tend to hurt constituencies liberals claim to care about, primarily consumers and the poor. They also tend to hurt small entrepreneurs and are often an abusive use of government power, which is why conservatives and libertarians tend to dislike them.
The first example from National Review is one that people have been fighting about for years: coffin cartels. A coffin is a fancy box that takes no training to use or sell and can not hurt people because its occupant is already dead.. Funeral directors have a history of overcharging consumers for caskets and with the help of some state governments charged casket handling fees on consumers who tried to buy cheaper caskets from third parties. The funeral industry had virtually eliminated competition until the Federal Trade Commission ruled these fees illegal in the late 1980's. In states like Oklahoma however, you still must have a funeral director license to sell caskets and the license requires you to go through several years of extensive training that has nothing to do with caskets. Eugene Volokh has more information on the casket cartels here.
The second example is from Dangerous Dan who points out that the state of Florida created the Florida Tomato Committee to decide what is and what is not a tomato. This means that some breeds like the uglyripe, which is ugly but supposedly tastes really good, can not be sold in Florida, while other tomatoes that look good, but taste worse than the uglyripe, are allowed to be sold. The tomato cartel gets to decide what we get to buy, even if there is another version that we might like better. This benefits the big tomato growers in the short turn, but eliminates innovation and hurts small businesses and consumers.
Posted by Pete at January 21, 2005 03:00 PM
Trackback Pings
TrackBack URL for this entry:
http://www.petetheelder.com/mt-tb.cgi/281