The Faux Morality of Big Government and Anti-Gouging Laws
Published in The Tennessean, Sunday, November 11, 2012 and in
FORBES with archives.
I am less afraid of hurricanes than I am of voters. Luckily I
live in a place where the danger from either is limited. That is a roundabout
way of saying that I live in an inland “red state” where my neighbors have
refrained from voting to tax my employment income, do not require me to join
any trade union, and do trust me to carry a handgun.
When a hurricane struck the Northeast, my family and I were
not directly affected. But when voters in the Northeast went to the polls, we
were affected. That is not to suggest that anyone in my state would begrudge
the use of federal funds to provide emergency assistance, though they might
believe that state and local governments are much better suited for the
planning and delivery of such emergency services. They might also question the
wisdom of cycling the funds through Washington, DC.
My state is also the source of volunteers, people who have
contributed not only their private funds, but also their time and presence to
give direct emergency assistance. If anything is begrudged, it is the passage
by voters (through their representatives) of laws and regulations that make it
more difficult to render assistance as they make it more difficult to live.
Life is made more difficult when voters shift powers and
resources away from the local and state levels up to the federal level. For
most of what we do, central planning is an extremely poor substitute for the
individual planning and free association of private individuals. Federal
regulations and the excessive taxes needed to pay for federal transfer programs
(especially those of questionable constitutionality) are just another layer of
insult heaped upon our more modest local errors.
Foolish editorialists suggested that the response to
Hurricane Sandy demonstrated the efficacy of big government. But more sober
reflection suggests the opposite. Those countries where people are least able
to respond to natural disasters are Third World countries, which are
characterized by the lowest levels of economic freedom. A Third World
government is one that invariably overburdens its people with tax and regulatory
restrictions on commerce, with the possibility of waivers purchased on the
side. The result is poverty.
On economic freedom, most voters seem not to care that the
United States no longer leads the world. They seem unaware of the link between
their votes and four years of economic stagnation. They seem to believe that
big government saved them from an even greater financial crisis, apparently
unaware that the financial industry, along with the health-care industry, were already
among the most heavily regulated in America.
Under these burdens, we are less able to help the people of
the Northeast, just as they are less able to help themselves. Entrepreneurs
would find a way to deliver gasoline and generators from other parts of the
country, but they would risk prosecution for “price gouging” by the state attorney
general were they to charge a price sufficiently high to cover the extra costs
of the special shipments. So entrepreneurs stand down and the people of the
Northeast wait in gas lines.
The faux morality of anti-gouging laws does not cause
hurricanes, but it does exacerbate shortages and the resultant suffering. A
state's disaster preparedness should include the repeal of such hindrances as
anti-gouging laws – even in my red state.
Richard J. Grant is a Professor of
Finance and Economics at Lipscomb University and a Senior Fellow at the BeaconCenter of Tennessee. His column appears fortnightly on Sundays. E-mail messages
received at: rjg@richardjgrant.com
Follow on Twitter @richardjgrant1