In his latest post at the Globe & Mail‘s Economy Lab, Stephen Gordon points out that governments get the entire prosperity thing wrong:
The next time a political party vows to defend the interests of the producers in a certain industry, you should ask why it isn’t choosing to defend the interests of consumers instead. Because the contribution of an industry to the public good is not its ability to provide large incomes to those who work there; it is its ability to produce things that people want to buy.
Business groups may give lip-service to the benefits of competitive markets, but their heart isn’t in it; they know that their real interests are best served by providing reduced output at high prices. And that’s exactly what we get whenever governments set policy in order to benefit producers: see, for example, our dairy industry.
The motives of producers who call for special treatment in the name of consumer protection are equally suspect. Producers are not in business for their health, and they definitely are not in it for your health. So when producers call for regulations in the name of protecting consumers, you can generally assume that the real and intended effect is to exclude potential competitors: see, for example, our dairy industry.
