Saturday, October 11, 2008

Regulation: How Big Business Suppresses Competition

I need to return some books to the library, so I'll be posting a few of their thoughts that I found insightful. In Impostor (New York: Random House, 2006), Bruce Bartlett cites the following examples of big businesses lobbying for regulation so they can suppress competition. Remember that big businesses can support the costs of regulation, whereas small businesses have a harder time doing so.

"After a federal regulation on pool slides drove all its competitors out of business, the Aquaslide 'N' Dive Corporation heavily lobbied the Consumer Product Safety Commission to retain the regulation when the commission decided it was no longer justified.

"California cement producers lobbied to protect the endangered brown pelican in order to prevent construction of a new terminal in Redwood City for the importation of foreign cement.

"Package delivery companies UPS and FedEx are normally fierce competitors, but when threatened by delivery of Deutsche Post into the U.S. market they immediately joined forces to get the Department of Transportation to bar it from doing business here.

"Telecommunications companies frequently use government regulations to prevent potential competitors from getting into the business. Currently they are fighting companies that offer phone services over the Internet.

"Liquor wholesalers are fighting efforts to allow consumers to buy wine over the Internet--for no other reason except to maintain their legal monopoly on wine distribution and prevent consumers from having more choice at lower cost" (104-105).

This doesn't exactly fit your typical leftist narrative: in which evil businesses oppress people until our savior, big government, swoops down to save the day. I was going to post this for a while, but it's appropriate especially now, when "deregulation" is becoming a dirty word.