Government monopolies hurt the middle class and our liberties

Britt Storkson_thb

by Britt Storkson

Political conditions today are similar to those of about 100 years ago that spawned the Sherman Anti-trust act, passed in 1890.  Back then private industries formed monopolies to restrict supplies of goods and services to artificially drive up prices to benefit the producers at the expense of consumers while laissez-faire government looked the other way.

Now instead of private enterprises creating the monopolies governments create, maintain and protect these monopolies at the direction of and for the benefit of private individuals.  A monopoly isn’t illegal if the government makes it…A la the U.S. Postal service.  All it takes is giving enough money to enough politicians to make it happen.

The process is simple.  Industries organize into trade groups who then hire one or more lobbyists.  These lobbyists are often “retread” politicians who have been thrown out of office by constituents who didn’t like their corruption among other things.  These lobbyists funnel campaign contributions (money) to key members of congress and senators who write and pass legislation that creates the monopoly.

How does this happen?  Take any profession, trade or industry.  It doesn’t matter which one as it’s the process that’s the problem, not the industry.  Let’s say that you’re a concrete contractor.  Let’s say that the government passes a law that says that you are the only company that can sell concrete products (sidewalks, concrete patios, foundations, etc.) within a certain area.  If someone else tries to sell competing concrete products they get fined or otherwise run out of business by government.

What’s going to happen to the price of your products?  Prices are going to go up.  Way up since you’re the only game in the area and it is too costly to transport concrete products from other areas to meet the demand.  Then the government passes a law requiring everyone to have a sidewalk in front of their home or business under to make walking along the road safer.  And who’s against safety?  What’s going to happen to the cost of concrete?  Again, concrete prices go up.

And there is no limit to what the concrete contractor can charge for their product.  This is basically price-fixing with the government fixing the prices.  Of course the product quality goes down because the contractor is going to produce the product as cheaply as possible since there is no competitor doing better work.

There is also no requirement that the prices they charge must be equitable.  The contractor can charge the elderly widow with little income high prices to put in the sidewalk in front of her house while charging little or nothing for the same work done for a wealthy individual with government connections.  And of course who pays what price is a secret.  Also there is no requirement that the law be enforced uniformly.  While the widow on a fixed income is required by law to put in a costly sidewalk the wealthy campaign contributor can get a “waiver”.

With the government created monopoly called Obamacare this means that a doctor can charge a middle class factory worker $20,000.00 for cataract surgery while an illegal alien pays $200.00 for the same surgery.

With monopoly utilities they can sell water, power, etc. for little or even give it away to well-connected individuals while the average customer pays a much higher “list price” for the service.  Then the utilities feed back some of the ratepayers money to the politician to make sure that nothing changes in this regard.

What about product liability resulting from shoddy or dangerously inferior concrete construction?  Now the government is liable, not the contractor further reducing the concrete contractors’ costs.  With shoddy construction practices the number of lawsuits related to poor quality goes up benefiting (of course) the lawyers.

Soon people get tired of paying high prices for concrete products and complain to their legislators.  Rather than ending the government created monopoly that created the problem in the first place they provide loans and grants to “provide relief” from high concrete prices.  And when people can’t pay the loans government provides “loan forgiveness” or other “relief”, which amounts to funneling tax money indirectly to the concrete contractor.

While the details vary from industry to industry government-created monopolies all have several things in common:

  • They all require large amounts of money to be given to key politicians to make this happen.  Any trade or industry can take advantage of this opportunity as long as they “pony-up” enough money.
  • The legislation creating this monopoly is almost always “sold” to the public as “benefiting and protecting the consumer” or a variant thereof when it really   benefits and protects the producer at the expense of the consumer and taxpayer.  One of many examples:  High-priced union electricians are “sold” to public as a safety benefit while electrical engineers, who know far more about electrical principles, are not allowed to be electricians.
  • There are often different levels of beneficiaries.  For example, while government-created monopoly known as Obamacare may benefit some people (the consumers) the primary beneficiaries of Obamacare are the doctors and lawyers who paid the politicians to write it into law.
  • The legislation almost always excludes any citizen/taxpayer input and most provisions are imposed by legislative fiat with very little opportunity for successful legal challenge.  There is also no limit and how much money that can be spent on lawyers to defend even illegal activity to maintain this monopoly.
  • Not only is money given to politicians to create this monopoly but money must be continuously flowing from the industry to the politicians to maintain these monopolies.  All spending bills have expiration dates and must be renewed at regular intervals.

When I was a small child in the late 1950’s the doctor made house calls and I can remember my mother taking money out of her purse to pay the doctor when he was done.  It was simply free enterprise in action.  Why can’t we have free markets for all trades and industries?

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Posted by at 04:00 | Posted in Government Overreach | 19 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Bob Clark

    Nobel Laureate, James Buchanan, demonstrated government itself is an economic rent seeking monopoly, with government bureaucrat(s) seeking to maximize government revenue from which they use to fund their own self enrichment (be it through increased compensation or in kind benefits). But as you point out, Buchanan is probably an optimist, as Government is more than a rent seeking monopoly in American culture but rather a monopoly and an economic waste generating apparatus. The City of Portland is prime example of a public waste generating regime, and one which at the same time continually squeals for more of its citizens hard earned property.

    • DavidAppell

      If you hate Portland so much, why don’t you move already?

      • .

        There’s room in Salem if DA would vacate and take his premises back to NY and stump for Anthony Weiner.

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