I’m not sure what you mean by “artificial”. We put all kinds of restrictions in the political realm and the constitution is there for the sole purpose of deliniating the powers alloted to the gov’t and how the gov’t is supposed to function. It’s full of engineered barriers, as it should be.
Fair enough, I was thinking of barriers that reduce system flexibility - e.g. the amendment to prohibt more than two terms for the president strikes me as unnecessary and undesirable reduction in flexibility. Balanced budget amendments are another.
Having to pay someone else to live on the planet is certainly a restriction on economic liberty. How did they get the land before you were born. You’re stuck with the system.
How about a maximum limit on how much land an individual can own for non-food production applications?
Why not accounting mandatory in highschool? That doesn’t violate any capitalist principles I’m aware of.
Is hiding information and lying an economic restriction?
Dal Timgar
One place we need more government price regulation is in the auto insurance field. Society has decided that mandatory auto insurance is in the public interest. Fine. But when you take away my option to not buy the product at all, you have damaged the free market that regulates prices. To restore a level playing field, the government should establish the level of profit allowed in this industry, and set the prices that may be charged. If private corporations decide they don’t want to play on a level field and withdraw from the industry, auto insurance should be nationalized.
december, do you agree that mandatory auto insurance is an infringement on the free market? If not, I suggest your entire OP is hyprocrital nonsense.
Yes, I sure do agree. When I entered the insurance business in 1968 only 3 states had mandatory auto insurance. And, they had high premium rates.
These are two separate ideas, as can be seen in the case of workers compensation insurance, which is also mandatory. Many states sell WC in competition with private companies. That’s a good way to preserve a market while also allowing competition. Also, many states regulate the rates, whether or not the state itself sells WC insurance. However, rating freedom has grown enormously in the last 25 years. For better or for worse, I played a significant role in that change.
Anyhow, it certainly makes sense that if the government requires a certain type of insurance, they should prevent price-gouging and preserve moderate prices. However, there’s a lot of evidence that rate regulation actually leads to higher rates. Certainly, when workers compensation premium rates were deregulated, the rates dropped a lot. Same thing happened with airline ticket costs and in other areas. When adequate competition exists, the market generally does a better job of holding down prices than the regulators.
KeeeRRACK!!!
That sound was hell freezing over; I actually agree with december on something.
OK, let’s continue. If not price regulation, then how would you suggest the auto insurance market be restored?
Why? Just because we have to buy something, doesn’t mean that competition is stifled.
We all have to buy food, don’t we? Therefore, should the gov’t regulate food prices?
Fear:
If you don’t like the food analogy, here’s two more:
In CA, the state requires that all children in cars be seated in a booster seat. Does the state need to regulate booster seat prices?
In CA, the sate requires that all children 16 yrs or younger must wear a safetly helmet when riding a bicycle. Does the state need to regulate bicycle helmet prices?
december, I wonder why your list didn’t include intellectual property laws: copyright, trademarks, and patents.
They “provide financial benefit to one group at the expense of another” and limit our liberties. There are moral arguments to be made both for and against intellectual property, just like the other economic liberties you listed.
The only real difference I see is that intellectual property laws primarily benefit businesses, and the examples you cite (minimum wage, for example) primarily hurt businesses.
I just didn’t think of them.
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They “provide financial benefit to one group at the expense of another” and limit our liberties. There are moral arguments to be made both for and against intellectual property, just like the other economic liberties you listed.
Intellectual property laws helps businesses that own the patents or copywrites, while harming other businesses that want to use their intellectual property. Presumably they help society in the net, by encouraging innovation and creativity. I think the recent extention mad the copywrite period too long. It helps Disney, but it hurts other creative people who could work off of Disney characters.
Minimum wage laws hurt businesses that make use of low-paid labor, but they help businesses that are highly automated by reducing their competition. They also hurt some workers who would like to work for subminimum wages, when sub-minimum wage jobs would be offered if legal, whereas minimum wage jobs are not available. E.g., it would be nice if entry level teen-agers could be paid lower wages for a while. They’d be better off working for low salaries than just hanging out.
The key question is whether minimum wage laws help or hurt society. My feeling is that a minimum wage set too high will hurt society, by reducing business oppotunities. A low minimum wage won’t do much harm, but it won’t do much good. It’s hard to get a minimum wage just right, because it typically applies over a broad area in which prevailing wages vary considerably. A minimum wage that makes sense with San Francisco’s cost of living will be too high for Podunk.
“The key question is whether minimum wage laws help or hurt society.”
The key question is whether the gov’t should tell someone: “You cannot work for less than x dollars/hr”.
This thread is, after all, about liberty, no?
Well, if government, business, labor and the consumers all played fairly, legally and ethically in the economic arena (let alone anywhere else) we could do away with quite a few regulations.
All three are bogus analogies because, unlike insurance, all three are commodities. If there is a price disparity, in a free market, anyone can manufacture and market food, child seats or safety helmets and provide competition. The artificial barriers to entry into the insurance industry have created a closed market stifling the market expansion that creates competition.
Or, whether the government should tell someone: “you cannot offer to trade good/service X for good/service Y”
I don’t see it that way. Without those laws, IP wouldn’t have gotten made in the first place. “Liberty” does not include telling someone “you MUST do X, and then give it away for free.” People who produce IP have a right to set a price for what they do just as much as anyone else, and set whatever terms they want for selling it. The main problem with IP is that the resource is hard to define as a discrete thing that somebody produced first. In theory, however, that’s not really unlike any other resource: at some point people had to go out and acquire something (like land/property) that was just sitting out there for the taking and make a claim on it. How one can validly make such a claim IS an important and rather contenious subject (personally, I don’t much by the Lockian “mixing your labor with it” stuff, and I’m not sure that there IS a good answer: who gave anyone the right to originally claim a given natural resource and prevent others from using it? It’s a very deep philosophical question)
What “artificial” barriers?
If they exist, then the answer is to get rid of or reduce them, not to pile more market distorting mechanism on top of them.
It’s pretty easy to enter the insurance business. The required capital isn’t that large. The barrier is that State Insurance Dept. approval is required. Some corrupt insurance departments require that the application go through a preferred law firm, which presumably kicks back money to state officials.
In fact there are thousands of insurance companies admitted in the United States. I haven’t checked Alaska; they may have fewer. Note that insurance companies don’t need patents, warehouses, land and water resources, access to raw materials, power supply, etc. In short, it’s easy for an insurance company to expand its operations or for a new company to form.
The main barrier to auto insurance competition is the companies’ expectation that they’ll lose money. E.g., low-priced companies are leaving New Jersey, having concluded that state regulators will force them to sell auto insurance at a loss. This is one way in which regulation designed to hold prices down can have the perverse effect of driving prices up.
There is, of course, a good case for market failure in most insurance markets. But just because there’s a problem doesn’t ipso facto mean that what the government is doing is actually helping, rather than making things worse.
Aye, there’s the rub. The State Insurance Commissioner is frequently a previous insurance company executive with ties and interests there. The mission of protecting the consumer from unethical insurance operators has morphed into a tool for protecting the turf of established companies, and maintaining high premiums in the market. Do you think I would have any chance of being approved if I formed a non-profit co-op to provide insurance services at cost?
More wishful thinking instead of taking action that would actually benefit consumers. Industry lobbyists will make sure that legislation to do what you suggest is never supported, and lawmakers will throw up their hands and say “we tried, but the people don’t want reform.” The market is distorted by making products mandatory. Government created the problem, it can only be solved by direct government involvement.
I’m afraid your comments are not all correct, FI
Insurance Commissioners come from many backgrounds: politicians, insurance executives, academics, consumerists, etc. I don’t know what you mean by “ties and interests.” Certainly commisioners have contacts with insurance executives. I don’t believe a commissioner would be permitted to have a financial interest in any insurance entity.
You many be surprised to know that one original major goal of insurance regulation was to be certain that premium rates weren’t too low. That’s in every state’s rating law. The point was to avoid bankruptcy, which would mean that claims wouldn’t be paid.
Yes. Such entities are generally in the form of Mutual insurance companies. Some of our largest companies are mutual, like State Farm. Quite a few new mutuals were formed by groups of doctors to sell medical malpractice insurance. You could indeed form a mutual.
You have failed to defend your premise and now resort to saying my view is unrealistic but yours is realistic. If that’s what you call a debate, then there really is no point in continuing.
When I remodelled my house, the gov’t had all kinds of req’ts concerning how many electical outlets had to be installed in each room and where they could and could not be placed. And yet I was able to get bids from many electrical contractors (all, BTW, req’d by the state to be licensed) and got a huge spread of quoted prices.