Column for March 6, 2008

So, the free market system actually works? Ya' think??

Just as expected, the free market system is thriving and beating out old, ineffective governmental regulation and subsidy. I read with interest the article in last week's paper about the increase in tobacco business for local farmers because the quota system has been abolished. Tobacco acreage in the county has increased 46%, according to the article. The headline said, "Quota gone means local farmers grow more tobacco". Upon reading that obvious line, I said, "Nooooo...ya' think???" It is not the writer I was questioning, but the obviousness of the outcome so stated.

There are a few things for which government regulation is appropriate and necessary. Primarily, these areas deal with business ethics. Make no mistake, the mantra "You can't legislate morality" is totally false. The same people who use this phrase or battle cry the most are the very ones who wish the government to regulate morality most. Quite often it is to protect their own aberrations, but the same government that protects the individual freedom is sometimes the one that protects from incursion. A great example are the Enron and WorldCom scandals. About the only protection that citizens have is government regulation in such cases.

The absence of regulation, however, has great effect when it comes to innovation. A great example is that the local cable company offers an alternative to the monopoly telephone company for home phone service. The service via cable is reliable, good quality, competitively priced, and a great value, considering the calling features and unlimited long distance plan that comes with the service. Had this been an even more heavily regulated concept, there may not be an alternative to the technology of the turn of the 20th Century.

The same free enterprise spirit allowed by governmental regulation is conversely hurting that same industry. All television signals must convert to a digital format rather than broadcast analog by the end of February 2009. That is less than a year away. A lot of telecom, cable, and broadcast companies will end up charging more money to accommodate the government regulations being imposed for a change to newer technology. The industry had thus far been driven by consumer demand and cost effectiveness. Now, millions of television viewers will be left without broadcast television because of a government regulation that in effect has made the televisions in millions of homes obsolete. Sure, television is a luxury, not a necessity. However, government power has been exercised to the chagrin and cost of many.

Had tobacco growers been allowed to simply grow all the tobacco they wanted and sell to whomever they wanted in years past, there would have been no reason for a quota system, much less a quota buy out. We as tax payers forked out millions of dollars to buy out the quota system only to see the tobacco business grow after the government control was scrapped, thus benefiting the farmers twice. The same should be done for all other crops in this nation. The free market system must be allowed to determine how much corn, soy, turnips, whatever, are grown, not government regulation and interference. We should never pay farmers to not grow crops or incentivize the growing of other produce.

It is precisely government regulation that has gotten us the boondoggle of ethanol use and implementation in this country and thus the created market and demand. Few people would voluntarily use ethanol as a fuel, considering the cost, the miles per gallon, and the scarcity of the product. A few pinheads thought that benefits would fit some Utopian plan and therefore we should all pay the price for the vision of a few charlatans. This is not to mention the idea that corn producers would benefit greatly and lobbied for the governmental interference. Without such interference, corn farmers would be forced to compete on the world market for their produce and/or change their crops. However, forcing the sword of government regulation is easier than actually competing and working harder at the expense of all others.

If people can not compete in a given field of endeavor, then they need to either change professions or learn to compete rather than get the government involved. Those who can compete should be unshackled in order to be able to partake of the free market system. That is, after all, what made us the most powerful nation on the face of the planet, most likely in all of history. We are actually committing national suicide slowly but surely in many ways.