Monday, March 15, 2010

Got Rent? Raw milk and rent-seeking

Wisconsin resident Sean Scallon at the @TAC blog covers last week's hearing in Eau Claire concerning the sale of raw milk. In the strange bedfellows joined in support of raw milk, Scallon sees a possible manifestation of the "freedom movement" and makes a good point about a split among libertarians, which seems to follow the coastal vs. national interior fault lines that run through so much of our culture.

But it was this item that really stood out for me:
And yet who stands in opposition? Government bureaucrats and the big farmer, big agribusiness dominated Farm Bureau. One wishes to regulate behavior and the other wishes to regulate out of existence a product that may cut in on their business. A state ag department that doesn’t have enough inspectors to monitor large farm operations and the manure finds it does have personnel to go after the little guy and his tank of raw milk on his small farm. [EA]
When business seeks to increase or protect profits through political influence rather than innovation in the marketplace we have rent-seeking. This behavior is absolutely corrosive to a free-market system. It hurts producers by keeping them out or running them out of business. It hurts consumers through fewer choices, less competition, and higher prices.

Any government regulation should be scrutinized in an attempt to determine if it serves some compelling public interest, and not simply the interest of well-connected, and funded, private firms.

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