Government Regulation; Liberty, Monopoly & The Consumer

It’s common knowledge that in what’s left of our free-market that the government, through legislature, is a necessary source of safety and consumer protection. Without this overarching government, stretching from health & safety law to outright bans, the individual would be extorted and doomed to Salmonella infested sandwiches, collapsing buildings and exploding TV’s by the evil capitalists trying to make a quick buck.

The free-market has responded to the consumer demand for cheap transport with innovative new websites and apps which provide unofficial taxi services for far less the cost of traditional taxies. Not only are these apps efficient, but they also provide instant ratings systems for both driver, and passenger, allowing users of websites like Uber to leverage their money and potential risk through the pricing system. Drivers who provide an excellent and safe service will be highly rated and reap greater rewards in both cash and passenger numbers. Likewise if certain passengers are smelly, overly annoying, or try to avoid paying the drivers have the choice to avoid them.

Some make the argument that these websites and apps like Uber will increase the risk for passengers. Despite the benefit of a ratings system which regular taxies do not have to adopt, individuals are perfectly able to continue using government licensed taxies at the higher cost, should they feel that way. A law banning and regulating these services could only seek to harm consumers by limiting choice and recreating the market problem of modern taxies.

So that would be a winner for consumers, right? Well not according to taxi drivers whom around the world are protesting en masse on behalf of the consumer. That’s awfully nice of them but could there be another reason, perhaps, as to why they are protesting? Taxi drivers have traditionally been the beneficiaries of government granted privilege, in that, they are protected from competition through licensure and arbitrary safety standards.

These ride-share apps, courtesy of capitalism, are the first real competition British cabbies have faced apart from the influx of migrants since the 70’s until now, which even today they manage to whine and complain about. Remember what cabbies were saying about the immigrants taking over the taxi industry back then and even now? The reality of this new innovation is that, harsh as it sounds, will force through competition of the market for the taxi industry to meet the consumer demand of lower prices, high standards, or die.  It’s far easier to protest and get new competition banned by government, than to compete. As a general rule if an industry is whining about unfair competition then the free market is working.

In reality we can apply the same logic to any consumer protection used within the marketplace. All this regulation can achieve is to curtail liberty by reducing choice, something far more important than the sugar and salt levels of a microwave meal. Shouldn’t it be my choice as a free individual whether to share a ride with somebody else in exchange for money? I mean who invited the taxi driver or government official into our discussion?

Imagine all requirements for licensing and qualifications within the trades’ ended and we had an unregulated free market tomorrow. Now this doesn’t mean that tradesmen can lie about their qualifications and experience which in-turn could void the contract between them and the consumer.

Poor quality barbers providing shoddy services would go out of businesses quick and fast, yet the consumer would have the freedom to leverage their risk against the price of a haircut. The cheaper less experienced, or non experienced, barbers wouldn’t be banned by government and yet might provide the potential for a higher risk of a bad hair-do, yet the twenty years experienced professional can still earn more. Who do you suppose would be against this scrapping of legislation and turning back to the free market solution? Well, just as with the taxi industry, it would of course be the barbers. Once a barber has jumped through the hoops of government regulation in order to become a registered tradesman, he has the upmost incentive to make it harder and harder for new competition to thrive.  Of course this isn’t self interest whatsoever; it’s a pure and selfless action to aid the consumer. Yeah right. The same can be said for any regulated profession from plumbers to chefs.

The reality of the free market is that those offering a product or service have the greatest incentive to avoid poisoning their customers or providing poor quality service. Government legislators and bureaucrats on the other hand suffer little repercussion, if any, for their producing of market failures for consumers. We entrust the free market, strangers we have never met, to provide the best things in life without government mandates; cars that can reach speeds of sixty miles per hour in three seconds, tractors that can plough the fields of fifty men, and a thousand types of peanut butter. Perhaps we should allow that same system to flourish instead of tying its feet together with the tape of regulation, only to stand and mock when it falls over and collapses.