Daily Adams

Free Markets

New York Yankees v. Free Market

Feigning concern that fans would be ripped off, Yankees COO Lonn Trost admitted in an interview with WFAN radio that the real reason for banning print-at-home tickets was to protect the feelings of the high-rollers who overpaid for their premium seats and to keep those customers safe from the presence of less ostentatiously wealthy attendees who may have (gasp!) “never sat in a premium location.”

Via New York Yankees Don’t Understand The Free Market – Hit & Run : Reason.com.

Lawsuit Over Stifling Wisconsin Baked Goods Ban

Anyone with an oven and a recipe should be able to have a baking business—but that is not the case in Wisconsin, where selling baked goods made in your home kitchen is punishable by up to $1,000 in fines or six months in jail. Wisconsin is one of only two states (the other being New Jersey) to ban the sale of home-baked goods.

Wisconsin’s home-baked-good ban has nothing to do with safety. The state bans home bakers from selling even food the government deems to be “not potentially hazardous” such as cookies, muffins and breads. The state also allows the sale of homemade foods like raw apple cider, maple syrup and popcorn, as well as canned goods such as jams and pickles. In addition, the state allows nonprofit organizations to sell any type of homemade food goods at events up to 12 days a year.

The ban is purely political. Commercial food producers like the Wisconsin Bakers Association are lobbying against a “Cookie Bill”—which would allow the limited sale of home baked goods—in order to protect themselves from competition. Assembly Speaker Robin Vos, who owns his own commercial food business, even refused to allow the Assembly to vote on a Cookie Bill last session, despite bipartisan support.

That’s why on January 13, 2016, three Wisconsin farmers joined with the Institute for Justice in filing a constitutional lawsuit in state court against Wisconsin’s State Department of Agriculture. The lawsuit will ask the court to strike down this arbitrary home-baked-good ban and allow home bakers to sell home-baked goods—like muffins, cookies and breads—directly to their friends, neighbors and other consumers.

Via Wisconsin Baked Goods Ban @ Institute for Justice.

Markets Need a Vigorous, Vigilant Defense

While everybody benefits from a competitive market system, nobody benefits enough to spend resources to lobby for it. Business has very powerful lobbies; competitive markets do not. The diffused constituency that is in favour of competitive markets has few incentives to mobilise in its defence.

This is where the media can play a crucial role. By gathering information on the nature and cost of cronyism and distributing it among the public at large, media outlets can reduce the power of vested interests. By exposing the distortions created by powerful incumbents, they can create the political demand for a competitive capitalism.

Via A strong press is best defence against crony capitalism @ The Financial Times.

 

Big Business v. Markets

In 2014 big business opposed several of the most free-market members of Congress, and even a Ron Paul-aligned Georgia legislator who opposed taxpayer funding for the Atlanta Braves.

The U.S. chamber jumped into a Republican primary in Grand Rapids, Mich., to try to take down Rep. Justin Amash, probably the most pro-free-enterprise and most libertarian member of Congress. Free-market groups, including the Club for Growth, Freedomworks and Americans for Prosperity, strongly backed Mr. Amash.

And now the chamber plans to spend up to $100 million on the 2016 campaign. Roll Call, a Capitol Hill newspaper, reports, “Some of business’ top targets in 2016 will be right-wing, tea party candidates, the types that have bucked the corporate agenda in Congress by supporting government shutdowns, opposing an immigration overhaul and attempting to close the Export-Import Bank.” Politico adds a highway bill to big business’ list of grievances against fiscal conservatives.

This clash between pro-market and pro-business is an old one. Adam Smith wrote “The Wealth of Nations” to denounce mercantilism, the crony capitalism of his day. Milton Friedman said at a 1998 conference: “There’s a common misconception that people who are in favor of a free market are also in favor of everything that big business does. Nothing could be further from the truth.”

Via David Boaz: The Divide between Pro-Market and Pro-Business @ Cato.org.

Warping the market for health care

The GPO [Group Purchasing Organization] safe harbor is unique in federal law, permitting vendors to pay kickbacks to GPOs who in turn pay kickbacks to hospitals and for-profit hospital executives in return for sole-source contracts. This legalized banana republic corruption warps traditional free market incentives that give us continuously improving products and services at lower cost.

Via Rubens: Drug Prices, Crony Capitalism and Political Reform @ Exeter Patch.

Practical Virtue of Voluntary Exchange

The marketplace uniquely melds altruism and self-interest. Take Bill Gates, the man who pioneered the personal computer revolution. By empowering computer users everywhere, he became the world’s richest man; and now he is giving all his wealth away. Was he motivated by selfishness? Or was he altruistically trying to create the greatest good for the greatest number? The beauty of the marketplace is that Gates’ motivation doesn’t matter. You get pretty much the same result either way.

In a voluntary exchange, both parties are made better off. Moreover new entrants into a real market are opportunities for more mutually beneficial exchanges. But under zero sum rationing, other people are a threat. One person’s gain is invariably another person’s loss. One person’s place in the bread line is a place another cannot have. One person’s state-owned housing unit is an apartment another cannot have.

Via Capitalism, Socialism, and the Pope @ Independent Institute.

Drug Prices in a Regulated Market

But Daraprim is not sold in a free market. The pharmaceutical industry is largely a non-contestable market where a few large firms exist because of high barriers to entry, such as onerous government regulation. Added to this is the fact that Shkreli has a coercive monopoly on Daraprim, not because of patents (the patent on Daraprim expired long ago) but because few other firms want to make the drug since the government-imposed costs make it less than profitable.

What this means is that the prices of pharmaceuticals like Daraprim are not set by the free market. The free market isn’t the reason Shkreli was able to raise the price. In fact, if he had to sell his product in a truly free market environment the price would likely remain low. And even now, if he continued to keep the price high, some enterprising pharmaceutical company would start making Daraprim themselves, increasing the supply and lowering the cost.

Via A Drug Price Jumped 5,000 Percent Overnight. Blame the Government, Not the Free Market @ Acton Power Blog.

The work of free markets

First, free enterprise dramatically reduces extreme poverty. In 1970, over one-quarter of the world lived on less than one dollar per day. By 2006, about one in 20 people lived in extreme poverty — an 80 percent reduction. We have the adoption of free markets across the developing world to thank for this massive reduction. That it happened in less than four decades is all the more impressive.

Via Michael Strain: Pope Francis should praise free markets more often @ Washington Post.

Arguments Against Organ Sales Assume Too Much

People, especially those on the Left, often lazily argue against certain markets by asserting, without good evidence, that the market in question will be (behave as if it were) monopsonistic or monopolistic, and thus allow some to exploit others. (I’m looking at you, Marx. Read some real econ and take a shower while you’re at it.) Usually they have no evidence for this claim. But even in the uncommon cases where they do identify such monopsonies or monopolies, the solution isn’t obviously to forbid a market, but to do things to break up the monopsony or monopoly.

Via Of Course We Should Allow Kidney Sales @ BHL.

Free markets in capital, goods, and labor

Hugo Ortega crossed over the Mexican border and arrived in Houston, Texas, without documents and without knowing any English. Over the next few years, he would become a citizen through President Reagan’s amnesty program and go from washing dishes to owning multiple restaurants. Now, he and his wife, Tracy Vaught—whom he met while working as a dishwasher in her restaurant in the 80’s—are the “reigning powerhouse couple of Houston’s competitive restaurant scene.”

In this documentary produced by Katherine Wells for The Atlantic‘s American Dreams series, Ortega reflects on his journey within the industry. “I have a great responsibility to represent the Mexican cuisine in a proper way,” he says. “It’s a magnificent cuisine.”

Via FREE WHITEWATER.

No free-labor market for Sen. Sanders

Sanders has shown signs in the past that he is less pro-immigration than some of his Democratic colleagues. In 2007, he was a major Democratic opponent of George W. Bush’s immigration reform bill, arguing that welcoming more guest workers would drive down wages for American workers.

Via Bernie Sanders Joins Donald Trump In Denouncing Higher Immigration @ The Libertarian Republic.

Economically-ignorant concern

“The fact that so many third-world workers willingly endure the harsh conditions and low pay that now prevail in third-world garment factories is powerful evidence that these workers’ alternatives are even worse.  Therefore, if Mr. Morgan and other activists succeed in their efforts to reduce the rich-world’s demand for clothing produced in the third world,…