November 30, 2015

The Pennsylvania Steagles

Filed under: Economics, Football, History, USA — Tags: , , , , , — Nicholas @ 05:00

Megan McArdle talks about the plight of Pennsylvania’s two NFL teams during World War Two … oh, and some boring stuff about financial regulation:

Fun fact: During the 1943 professional football season, the World War II draft had so depleted the ranks of football players that the Pittsburgh Steelers and the Philadelphia Eagles were forced to unite their teams into a joint production that became colloquially known as “the Steagles.” In a heartwarming turn, this plucky band of men went on to one of the winningest seasons in the history of Pennsylvania football. That was, alas, their only season; the next year each city fielded its own team, and the proud name of the Steagles retreated into history.

I’m beginning to think that we should revive it, however, not for football players, but for those intrepid souls who continue to fiercely agitate for the return of the Glass-Steagall financial regulations. Like the Steagles, these people are not daunted by the many obstacles in their path. Like the Steagles, they are passionate in their determination. Probably also like the Steagles, they mostly don’t know much about Glass-Steagall.

And we desperately need a name for Team Steagles, because they seem to have become a powerful force in the Democratic Party. Last night’s Democratic debate, like the first one, featured lengthy paeans to the joys, and urgency, of a modern Glass-Steagall act. Somehow, an obscure Depression-era banking regulation has turned into a banal political talking point. Or worse — a distraction.

You, like the Steagles, may not know much about Glass-Steagall. That’s all right. There is no particular reason that most of us should know about Glass-Steagall, and many people manage to live perfectly happy and fulfilling lives anyway.

November 27, 2015

A different view of Uber and other ride-sharing services

Filed under: Business, Politics, Technology — Tags: , , , — Nicholas @ 02:00

Robert Tracinski on Uber as a form of “Objectivist LARP“:

If it sometimes seems like it’s impossible to restore the free market, as if every new wave of government regulation is irreversible, then consider that one form of regulation, which is common in the most dogmatically big-government enclaves in the country, is being pretty much completely dismantled before our eyes. And it’s the hippest thing ever.

I was reminded of this by a recent report about yet another attempt to help traditional taxis compete with “ride-sharing” services like Uber and Lyft: a new app called Arro, which allows you to both hail a traditional taxi and pay for it from your phone. So Arro takes a twentieth-century business and finally drags into the twenty-first century. This certainly might help improve the taxi experience relative to how things were done before. But it won’t fend off Uber and Lyft, because it doesn’t change the central issues, which are political rather than technological.


Uber has been hit with complaints that it’s running “an Objectivist LARP,” a live-action role playing of a capitalist utopia from an Ayn Rand novel. That’s pretty much what it is doing, and the results are awesome. And the benefits don’t stop with more drivers and lower rates. Uber is ploughing a fair portion of its profits into another wave of technological innovation—self-driving cars—that promises to offer even greater improvements in the future.

All of this should counter some of the despair about how to promote free markets, especially among urban elites who have been programmed by their college educations to embrace the rhetoric of the Left. Give them half a chance, and they will flock to capitalist innovations run according to the laws of the market.

The problem is that they don’t want to admit it. That’s where the euphemism “ride-sharing” comes in. To cover up the capitalistic nature of the activity, they tell themselves they’re “sharing” something that they are quite obviously paying for, and paying at market rates. Imagine what could be accomplished if they were just willing to drop the euphemisms and embrace the free market.

November 25, 2015

Food labelling laws and craft brewing … not a match made in heaven

Filed under: Bureaucracy, Business, Health, USA — Tags: , — Nicholas @ 03:00

Eric Boehm on how well-intentioned laws can still have significant and unforeseen negative side-effects:

Brewers are facing the prospect of spending potentially thousands to determine calorie counts for every variety of beer produced. Unless they spend the money to provide the information, breweries may never get their products into chain restaurants, like Buffalo Wild Wings and Applebee’s.

As is often the case with regulations, smaller breweries stand to lose the most.

“A regional craft brewer or a major brewery can spread the cost over a much larger volume of sales and it’s not so unreasonable for them,” said Paul Gatza, a former brewer who now heads the Boulder, Colorado, based Brewers’ Association, an industry group.

“Smaller guys that are just trying to sell a keg or two here or there, they have a decision to make on whether it is worth the additional cost to try to get their beers into chain restaurants,” Gatza told Watchdog.

The Food and Drug Administration is in the process of finalizing menu labeling rules that were part of the Affordable Care Act. Intended to make Americans more aware of their dietary choices, the rules are subject to controversy on several fronts, and the FDA announced in September that implementation of the new rules would be pushed back one full year, until December 2016, as the feds try to work out the kinks.

My favourite local brewery isn’t even a micro-brewery (they’re somewhere between a pico- and a nano-brewery): every week when I drop in, there are three or four new batches ready to sample (and it’s rare that there’s anything left of last week’s offerings). If they had to spend hundreds or even thousands of dollars to comply with detailed labelling requirements for every small batch they brewed, they’d never stand a chance of making a profit. I understand the urge to ensure that people have a chance to avoid ingredients that might make them ill, but this is the sort of regulation that tilts very heavily toward the big companies that have regional or national markets. A thousand dollars per product isn’t even a drop in the bucket to them, while to a small local business, that might be more than their profit margin when you require it be done for everything they produce.

November 20, 2015

Here’s a very disturbing economic issue

Filed under: Bureaucracy, Business, Economics, USA — Tags: , — Nicholas @ 03:00

At Coyote Blog, Warren Meyer shares his concerns about the constantly increasing regulatory burden of American business:

5-10 years ago, in my small business, I spent my free time, and most of our organization’s training time, on new business initiatives (e.g. growth into new businesses, new out-warding-facing technologies for customers, etc). Over the last five years, all of my time and the organization’s free bandwidth has been spent on regulatory compliance. Obamacare alone has sucked up endless hours and hassles — and continues to do so as we work through arcane reporting requirements. But changing Federal and state OSHA requirements, changing minimum wage and other labor regulations, and numerous changes to state and local legislation have also consumed an inordinate amount of our time. We spent over a year in trial and error just trying to work out how to comply with California meal break law, with each successive approach we took challenged in some court case, forcing us to start over. For next year, we are working to figure out how to comply with the 2015 Obama mandate that all of our salaried managers now have to punch a time clock and get paid hourly.

Greg Mankiw points to a nice talk on this topic by Steven Davis. For years I have been saying that one effect of all this regulation is to essentially increase the minimum viable size of any business, because of the fixed compliance costs. A corollary to this rising minimum size hypothesis is that the rate of new business formation is likely dropping, since more and more capital is needed just to overcome the compliance costs before one reaches this rising minimum viable size. The author has a nice chart on this point, which is actually pretty scary. This is probably the best single chart I have seen to illustrate the rise of the corporate state:


November 18, 2015

A maple-flavoured world’s first?

Filed under: Bureaucracy, Business, Cancon, Government — Tags: , — Nicholas @ 04:00

On the Mercatus Centre site, Laura Jones points out an unexpected Canadian first:

Canada recently became the first country in the world to legislate a cap on regulation. The Red Tape Reduction Act, which became law on April 23, 2015, requires the federal government to eliminate at least one regulation for every new one introduced. Remarkably, the legislation received near-unanimous support across the political spectrum: 245 votes in favor of the bill and 1 opposed. This policy development has not gone unnoticed outside Canada’s borders.

Canada’s federal government has captured headlines, but its approach was borrowed from the province of British Columbia (BC) where controlling red tape has been a priority for more than a decade. BC’s regulatory reform dates back to 2001 when a newly elected government put in place policies to make good on its ambitious election promise to reduce the regulatory burden by one-third in three years. The results have been impressive. The government has reduced regulatory requirements by 43 percent relative to when the initiative started. During this time period, the province went from being one of the poorest-performing economies in the country to being among the best. While there were other factors at play in the BC’s economic turnaround, members of the business community widely credit red tape reduction with playing a critical role.

The British Columbia model, while certainly not perfect, is among the most promising examples of regulatory reform in North America. It offers valuable lessons for US governments interested in tackling the important challenge of keeping regulations reasonable. The basics of the BC model are not complicated: political leadership, measurement, and a hard cap on regulatory activity.

This paper describes British Columbia’s reforms, evaluates their effectiveness, and offers practical “lessons learned” to governments interested in the elusive goal of regulatory reform capable of making a lasting difference. It also offers some important lessons for business groups and think tanks outside government that are pushing to reduce red tape. These groups can make all the difference in framing the issue in such a way that it can gain wide support from policymakers. A brief discussion of the challenges of accurately defining and quantifying regulation and red tape add context to understanding the BC model, and more broadly, some of the challenges associated with effective exercises in cutting red tape.

While I’m a huge fan of reducing the regulatory burden in theory, I can’t help but expect to be disappointed about the implementation in reality… (however, should the federal bureaucracy somehow manage to perform nearly as well as the BC experiment, it’ll be Justin Trudeau getting the credit for it, rather than Stephen Harper — but better that the country benefits as a whole rather than the former PM gets boasting rights.)

November 14, 2015

The US government has morphed from being part of “us” to being “them”

Filed under: Bureaucracy, Government, History, Liberty, USA — Tags: , , , , — Nicholas @ 04:00

Charles Murray explains why so many Americans are feeling alienated from their own government:

I have been led to this position by what I believe to be a truth about where America stands: The federal government is no longer “us” but “them.” It is no longer an extension of the people through their elected representatives. It is no longer a republican bulwark against the arbitrary use of power. It has become an entity unto itself, separated from the American people and beyond the effective control of the political process. In this situation, the foundational principles of our nation come into play: The government does not command the blind allegiance of the citizenry. Government is instituted to protect our unalienable rights. The more destructive it becomes of those rights, the less it can call upon our allegiance.

I won’t try to lay out the whole case for concluding that our duty of allegiance has been radically diminished — that takes a few hundred pages. But let me summarize the ways in which the federal government has not simply become bigger and more intrusive since Bill Buckley founded National Review, but has also become “them,” and no longer an extension of “us.”


In 1937, Helvering v. Davis explicitly held that the federal government could spend money on the “general welfare,” establishing that the government’s powers were not limited to those enumerated in the Constitution. In 1938, Carolene Products did what the Ninth Amendment had been intended to prevent — it limited the rights of the American people to those that were explicitly mentioned in the Constitution and its amendments. Making matters worse, the Court also limited the circumstances under which it would protect even those explicitly named rights. In 1942, Wickard v. Filburn completed the reinterpretation of “commerce” so that the commerce clause became, in the words of federal judge Alex Kozinski, the “Hey, you can do anything you feel like” clause.

Momentous as these decisions were, they were arguably not as crucial to the evolution of the federal government from “us” to “them” as the decisions that led to the regulatory state. Until the 1930s, a body of jurisprudence known as the “nondelegation doctrine” had put strict limits on how much power Congress could delegate to the executive branch. The agencies of the executive branch obviously had to be given some latitude to interpret the text of legislation, but Congress was required to specify an “intelligible principle” whenever it passed a law that gave the executive branch a new task. In 1943, National Broadcasting Co. v. United States dispensed with that requirement, holding that it was okay for Congress to tell the Federal Communications Commission (FCC) to write regulations for allocating radio licenses “as public convenience, interest, or necessity requires” — an undefined, and hence unintelligible, principle. And so we now live in a world in which Congress passes laws with grandiose goals, loosely defined, and delegates responsibility for interpreting those goals exclusively to regulatory agencies that have no accountability to the citizenry and only limited accountability to the president of the United States.

The de facto legislative power delegated to regulatory agencies is only one aspect of their illegitimacy. Citizens who have not been hit with an accusation of a violation may not realize how Orwellian the regulatory state has become. If you run afoul of an agency such as the FCC and want to defend yourself, you don’t go to a regular court. You go to an administrative court run by the agency. You don’t get a jury. The case is decided by an administrative judge who is an employee of the agency. You do not need to be found guilty beyond a reasonable doubt, but rather by the loosest of all legal standards, a preponderance of the evidence. The regulatory agency is also free of many of the rules that constrain police and prosecutors in the normal legal system. For example, regulatory agencies are not required to show probable cause for getting a search warrant. A regulatory agency can inspect a property or place of business under broad conditions that it has set for itself.

There’s much more, but it amounts to this: Regulatory agencies, or the regulatory divisions within cabinet agencies, operate as self-contained entities that create de facto laws that Congress would never have passed on an up-or-down vote. They then act as both police and judge in enforcing the laws they have created. It amounts to an extra-legal state within the state.

I have focused on the regulatory state because it now looms so large in daily life as to have provoked a reaction that crosses political divides: American government isn’t supposed to work this way.

November 5, 2015

The high-church organic movement is feeling under threat

Filed under: Business, Environment, Health, Media, Politics, USA — Tags: , , , , — Nicholas @ 02:00

Henry I. Miller & Julie Kelly on the less-than-certain future of the organic farming community:

The organic-products industry, which has been on a tear for the past decade, is running scared. Challenged by progress in modern genetic engineering and state-of-the-art pesticides — which are denied to organic farmers — the organic movement is ratcheting up its rhetoric and bolstering its anti-innovation agenda while trying to expand a consumer base that shows signs of hitting the wall.

Genetic-engineering-labeling referendums funded by the organic industry failed last year in Colorado and Oregon, following similar defeats in California and Washington. Even worse for the industry, a recent Supreme Court decision appears to proscribe on First Amendment grounds the kind of labeling they want. A June 2015 Supreme Court decision has cleared a judicial path to challenge the constitutionality of special labeling — “compelled commercial speech” — to identify foods that contain genetically engineered (sometimes called “genetically modified”) ingredients. The essence of the decision is the expansion of the range of regulations subject to “strict scrutiny,” the most rigorous standard of review for constitutionality, to include special labeling laws.


Organic agriculture has become a kind of Dr. Frankenstein’s monster, a far cry from what was intended: “Let me be clear about one thing, the organic label is a marketing tool,” said then secretary of agriculture Dan Glickman when organic certification was being considered. “It is not a statement about food safety. Nor is ‘organic’ a value judgment about nutrition or quality.” That quote from Secretary Glickman should have to be displayed prominently in every establishment that sells organic products.

The backstory here is that in spite of its “good vibes,” organic farming is an affront to the environment — hugely wasteful of arable land and water because of its low yields. Plant pathologist Dr. Steve Savage recently analyzed the data from USDA’s 2014 Organic Survey, which reports various measures of productivity from most of the certified-organic farms in the nation, and compared them to those at conventional farms, crop by crop, state by state. His findings are extraordinary. Of the 68 crops surveyed, there was a “yield gap” — poorer performance of organic farms — in 59. And many of those gaps, or shortfalls, were impressive: strawberries, 61 percent less than conventional; fresh tomatoes, 61 percent less; tangerines, 58 percent less; carrots, 49 percent less; cotton, 45 percent less; rice, 39 percent less; peanuts, 37 percent less.

November 3, 2015

Brian Micklethwait explains why libertarians love Uber

Filed under: Business, Economics, Liberty — Tags: , , , — Nicholas @ 02:00

At Samizdata, Brian Micklethwait discusses why Uber comes up in conversation with libertarians … constantly:

I and my libertarian friends all love Uber. By that I don’t just mean that we love using Uber, the service, although I am sure that just like many others, we do. I mean that we love talking about Uber, as a libertarian issue, as an issue that nicely illustrates what libertarianism is all about and the sorts of things that libertarians believe in. In particular, we believe in: technological innovation and the freedom to do it, for the benefit of all, except those in the immediate vicinity of it and overtaken by it, because they make a living from the technology that is being overtaken.


To me, the really interesting thing about Uber as an issue is how it makes a nonsense of the old Public Choice dilemma in pro-free market lobbying and opinion-mongering. I’m talking about the fact, which it does often tend to be, that when there is a lurch, proposed or actual, towards a free market, unleashed either by politics or by technology or by a mixture of the two, the people who suffer or who look like they will soon suffer are highly concentrated and easily organised and know exactly who they are. However, those who will benefit from the new dispensation are dispersed and hard to organise and tend not to know who they are. Consequently you get this imbalance in the political argument, in favour of the status quo, even if, in the longer run, many more people would benefit from the new dispensation than the old, and would like it very much, in the event that that ever discovered that they were benefiting from it.

Uber might have been invented to solve the above problem.

Thought: maybe there is a sense in which it was invented to solve this problem. Discuss.

October 28, 2015

Reducing the costs of regulation

Filed under: Bureaucracy, Government, Health, USA — Tags: , , — Nicholas @ 04:00

Henry I. Miller discusses a worthwhile regulatory change that would increase the availability of medicines in the US marketplace without reducing public safety:

The FDA would be a good place to start. Bringing a new drug to market now requires 10-15 years, and costs have skyrocketed to an average of more than $2.5 billion (including both out-of-pocket and opportunity costs) – largely because FDA requirements have increased the length and number of clinical trials per marketing application, and their complexity.

The detrimental effects of FDA delays in approving certain new drugs already available in other industrialized countries are well-documented and deserve as much attention as drugs’ high costs. An example is the three-year delay in the approval of misoprostol, a drug for the treatment of gastric bleeding, which is estimated to have cost between 8,000 and 15,000 lives per year.


A practical workaround to overcome regulators’ risk-aversion and capriciousness would be “reciprocity” of approvals with certain foreign “A-list” governments, so that an approval in one country would be reciprocated automatically by the others. That would make more drugs available sooner in all of the participating countries, increasing competition and putting downward pressure on prices.

Such an innovation would also help to alleviate another critical problem: The United States is experiencing shortages of certain critical pharmaceuticals, many of which have been essential in medical practice for decades. The majority are generic injectable medications commonly used in hospitals, including analgesics, cancer drugs, anesthetics, antipsychotics for psychiatric emergencies, and electrolytes needed for patients on IV supplementation. Hospitals are scrambling to assure adequate supplies of drugs that are in short supply, or to find substitutes for them. Reciprocal approvals would make numerous alternatives available.

As referenced yesterday, the FDA regulations also create temporary monopoly situations where only one company has the permit from the regulator to produce this or that medicine, so there’s nothing standing in the way of massive price increases if there are no close substitutes to provide price competition.

October 27, 2015

Update on that $750 pill and the regulatory system that made it inevitable

Filed under: Bureaucracy, Business, Health — Tags: , , — Nicholas @ 05:00

Tim Worstall follows up on all-world scumbag Martin Shkreli and his enabled-by-the-regulator insane price increases for a decades-old drug:

We have an interesting and important economic lesson for public policy here: markets, they work. More accurately, we don’t have to worry about someone attempting to exploit their possession of a contestable monopoly. We only have to worry, possibly take action, if someone has an uncontestable monopoly. And given that there’s very few of them that we don’t create ourselves for other reasons, this means that monopoly is just one of those things we can keep a wary eye upon but not worry over excessively.

Our example comes from Martin Shkreli. The basic background is that this entrepreneur thinks he’s found a pretty cool business model. There’s a number of pharmaceuticals out there that are well out of patent but still have small and useful markets. FDA regulations (no, we’ll not go into the details of how or why this happens) mean that it’s not as easy as one might think to produce generic versions of these out of patent drugs. So, as a business plan, buy up the rights to the permit-ed (as in, with a permit, not just those allowed, as in permitted) generics and as a result of the difficulty someone else will have in getting into the same market, some pricing power is available. You can then raise the price and start to bank your considerable profits.

This caused outrage when Shkreli announced that this was exactly what he was doing:

    Turing Pharmaceuticals, the company that last month raised the price of the decades-old drug Daraprim from $13.50 a pill to $750…

A 5,000% price rise certainly indicates that Turing thinks it has pricing power and thus that it has considerable monopoly power.


Markets, they work. As Mr. Shkreli is just finding out:

    Turing Pharmaceuticals, the company that last month raised the price of the decades-old drug Daraprim from $13.50 a pill to $750, now has a competitor.

    Imprimis Pharmaceuticals, Inc., a specialty pharmaceutical company based in San Diego, announced today that it has made an alternative to Daraprim that costs about a buck a pill — or $99 for a 100-pill supply.

This is not the same drug: it’s a slight variation, a close substitute. But it’s close enough that Turing isn’t going to be making much money from what it thought was monopoly pricing power. Because it was a contestable monopoly, not an absolute one.

October 5, 2015

Trading Pollution: How Pollution Permits Paradoxically Reduce Emissions

Filed under: Economics, Environment, Government — Tags: , , — Nicholas @ 04:00

Published on 18 Mar 2015

In an effort to reduce pollution, the government tried two policy prescriptions under the Clean Air Act Amendments of 1990. The first — command and control—mandated that each power plant lower its pollution by a determined amount. However, different firms face different cost curves and, because information is dispersed, policymakers don’t always know those costs. The second policy prescription — tradable pollution permits — empowered firms to use knowledge of their cost curves to buy or sell pollution permits as needed. Under this policy, the invisible hand of the market helped discover the lowest cost way of reducing pollution.

September 25, 2015

Reducing income inequality

Filed under: Bureaucracy, Business, Economics, USA — Tags: , , , , — Nicholas @ 02:00

Tim Worstall in Forbes:

There’s a fascinating and very long essay over in National Affairs about how we might cut income inequality. And, contrary to what any number of Democratic candidates for office will tell you, the answer isn’t to impose ever more regulation upon the economy. Rather, it’s to strip away some of the regulation that allows certain favoured income groups to make excessive incomes. Excessive here defined as greater than the economic value they add to the lives of the rest of us, something they achieve by carving out economic rents for themselves. I would, myself, go rather further than the writer, Steven Teves, and start using Mancur Olson’s analysis, that this is what democratic (note, democratic, not Democratic) politics always devolves down into, a carving up of the public sphere to favour certain interest groups. But even this milder version gives us more than just hints about what we should be doing:

    At the same time, however, we have seen an explosion in regulations that shower benefits on the very top of the income distribution. Economists call these “rents,” which we can define for simplicity’s sake as legal barriers to entry or other market distortions created by the state that create excess profits for market incumbents.

Let us take one very simple example of such rents. The earnings of those who possess taxi medallions in cities where there’s an insufficient number issued. Until very recently one such medallion, allowing one single cab to operate on the streets of NYC 24/7, had a capital value of $1 million. That led to a rent, a pure economic rent, of $40,000 a year to allow one cab river to use that medallion for 12 hours of the day. and, obviously, another $40,000 to allow another to use it for another 12 hours a day.

That is purely a rent: and one created by New York City not issuing enough medallions to cover the demand for cab services. Uber has of course exploded into this market and the success of that company, along with its many competitors, shows how pervasive the creation of such rents by limiting taxi numbers has been in cities around the world. That is an obvious and very clear creation of a rent purely through bureaucratic action.


Deregulating the economy will remove many of those rents. This will reduce income inequality. So, why aren’t those who rail against income inequality shouting for deregulation? Good question and the only proper answers become increasingly cynical. Unions exist for the purpose of creating rents for their members. So, given the union participation in the Democratic Party we’re not going to see calls for deregulation from that side. And different groups, those car dealers perhaps, the doctors, have their hooks into the Republican Party too.

My own answer is that it needs to be done in the same manner that Reagan treated the tax code. Not that I’m particularly stating that Reagan’s tax changes were quite as wondrous as some now think they were, only that it all had to be approached on a Big Bang basis. Everything had to be on the table at the same time so that while there were indeed those who would defend their little corner the over riding interest of all was that all such little corners got eradicated. With this rent creation, given that so much of it is at State level, that won’t really work. Except for one idea that I’ve floated before.

QotD: The danger of vague laws

Filed under: Law, Liberty, Quotations, USA — Tags: , , , — Nicholas @ 01:00

Prosecutors, and regulators more generally, like vague standards that are impossible to enforce consistently. It gives them a great deal of discretion in whom they target and how. It is a threat that can be wielded to force pleas to lesser crimes or other “voluntary” actions that obviate the need for a messy trial they might lose.

Megan McArdle, “California Accidentally Legalizes Campus Sex”, Bloomberg View, 2014-09-23.

September 24, 2015

Ontario takes baby steps toward liberalizing the beer market

Filed under: Bureaucracy, Business, Cancon, Politics — Tags: , , , , — Nicholas @ 05:00

At the Toronto Beer Blog, a less-than-enthused look at the latest changes to minimally change the just-barely-beyond-prohibition-era rules for selling beer in Ontario:

This has been a noisy day in the wonderful world of beer sales in Ontario. The Liberal government released the details of the new 195 page master agreement between The Beer Store, the Province (LCBO), and the new kids on the block, grocery stores.

Much of the information is what we heard when they announced it with the budget. Some more details have come out. If you read my thoughts in April, you will remember I was not happy. I’m still not.

The good from today’s news is there are some clear definitions of what constitutes a grocery store (10 000 sq/feet dedicated to groceries, not primarily identified as a pharmacy); that the 20% craft shelf space is for both grocery stores and The Beer Store, and that there cannot be a fee to get listed (though we all know how effectively the province enforces pay-to-play in bars around the province); and that they have some novel system to divide sales licenses between both huge chains and independent grocers.

The old news about shared shipping for smaller breweries and no volume limit for a second on-site retail location are accurate, and very good news.

But here’s the thing: This is just more Ontario political craziness.

This is to “level the field”, apparently for small brewers, who nobody would suggest get a fair shake in the current system.

But what could have been an actual leveling of the playing field, turned out to be more insanity and government control and meddling. And remember, I’m saying that as a sworn lefty nutjob, who generally thinks having controls and regulations is a good thing.

Remember, these are not the ravings of a far-right-wing free-enterprise-maniac … these are the regrets of a self-described “sworn lefty nutjob”:

A level playing field would be one where anybody could apply for a license to sell beer, and do it. A brewery can pick and choose who they sell to, as a retailer can choose who they do business with. Nobody would need to guarantee a percentage of shelf space, because the market would control what products were successful and got shelf space.

This isn’t a level playing field, it’s just a bunch of new rules to try to counter how horrible we’ve allowed our playing field to get. Yes, it will be more convenient for people who shop at one of the 450 stores that have a license. But the agreement still favours The Beer Store heavily (for instance, grocers are limited in the volume they can sell. They can exceed the limit, but then have to pay a fine to the LCBO who distribute it to, you guessed it, the breweries who own The Beer Store to offset their lost sales. Seriously).

September 21, 2015

Command and Control Solutions

Filed under: Economics, Government — Tags: , , , , , — Nicholas @ 02:00

Published on 18 Mar 2015

What happened to the cleanliness of your clothes after the U.S. Department of Energy issued new washing machine requirements? The requirements — which require washers to use 21% less energy — mean that washers actually clean clothes less than they used to. Is “command and control” an efficient way to achieve the desired outcome (which is less pollution)? Rather than a standard requirement, such as the Department of Energy issued, a tax on electricity would provide users with greater flexibility in their washing—and would prompt people to purchase machines that use energy more efficiently and keep their clothes clean.

Are there times when a command and control solution to a problem makes the most sense? We look at the eradication of smallpox as one example.

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