Tuesday, October 1, 2019
Competition Protects Consumers, Politicians Protect Themselves :: Politics Political Essays
Competition Protects Consumers, Politicians Protect Themselves Baltimore Sun political writer H. L. Mencken once warned, "The whole aim of practical politics is to keep the populace alarmed, and hence clamorous to be led to safety, by menacing it with an endless series of hobgoblins, all of them imaginary." As saviors politicians then announce an array of government programs to safeguard a grateful electorate from one hobgoblin or another. For that safety, taxpayers are forced to cough up billions of dollars to finance government agencies like the Federal Trade Commission (FTC), Consumer Product Safety Administration (CPSC), and the Food and Drug Administration (FDA). What is it that ultimately protects the consumer? It's not government but competition - many producers competing with each other for our dollars. What motivates a grocery store manager to have sales, introduce new products and services and incessantly search for other ways to please us and make us loyal customers? The easy answer is that the manager seeks greater profits, but profits cannot be simply decreed because he has no power to force us to shop at his store. He must lure us into his store pleasing us more than our next best alternative - his competitor down the street. The life of the manager and his employees, would be much easier if they could get legislators to write "level playing field" laws to "protect consumers" against cutthroat competition. A level playing field law might mandate that all grocers charge the same prices, sell the same items, and provide identical customer services. That way competition would be reduced. Right now your grocer and his employees know that if he charges high prices and provides poor quality service, you will take your business elsewhere. That would result in less business, lower profits and possibly bankruptcy. But if the manager and his employees could persuade lawmakers to enact a level playing field law, it would be a different story. The identical principle applies to workers. Some people think labor unions, Occupational Safety and Health Administration (OSHA), and minimum wage laws protect the worker. Labor unions, OSHA regulations and minimum wages laws do protect the jobs and income of some workers but at the expense of other workers' jobs and income. Labor unions and many labor laws are little more than a collusion against other workers. Union leaders argue that their right to strike is their most powerful tool in their pursuit of higher wages and better working conditions.