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Source link: http://archive.mises.org/13727/how-regulations-grow/

How Regulations Grow

August 30, 2010 by

The WSJ today runs a story on cigarette rolling machines that illustrates how the regulatory state can count on private enterprise to lobby for ratcheting up regulations.

It seems that there is a tax loophole that permits role-your-own smokes to be taxed at a far lower rate than what used to be called ready-roll cigarettes. So, no surprise, there are machine popping up everywhere that enable consumers to buy rolled-on-the-spot cigarettes for less than half the price of regular, pre-rolled smokes.

And guess who is unhappy about that? The industry leaders. “We are complying with the law, but some companies are not doing so in order to gain an unfair advantage,” said Ron Bernstein, chief executive of Liggett Vector Brands Inc., a unit of Vector Group Ltd. that is the fifth-largest U.S. cigarette maker by sales.

Therefore, fair competition is assured, not by lowering taxes but by raising them on everyone. A similar story can be told about how health-care mandates were universalized in American business. The minimum wage too. Once the dominant players have absorbed the costs of the state, they lobby for the costs to be imposed on their competitors too.

{ 8 comments }

J. Murray August 30, 2010 at 10:34 am

Reminds me of an old story:

There is a man who envies his neighbor for his neighbor has two goats and the man has none. One day, the man finds a magic lamp on his land. He rubs the lamp and out pops a genie who will grant him a single wish. The man then wishes for his neighbor’s goats to be killed. The genie asks, “Why do you want his goats dead when you can wish for two of your own?” The man then replies, “Becuase he won’t be as unhappy as I am.”

This is exactly what is going on in our society today. Add more regulations because the other guy isn’t when the harmed party should be asking to eliminate the ones burdening them instead.

guard August 31, 2010 at 2:07 am

Agree. The distinguishing characteristic of the one who envies is the desire to destroy the object of envy regardless of the cost to himself.
I am of the opinion that envy may be the primary motivation for demands for more “law and order”, control in any and every form. The person calling for more law is willing to lose his own freedom as long as he takes freedom from someone else.

Ryan August 30, 2010 at 11:01 am

How is it that people can still get away with statements such as “[The] tax loophole cost the US Government [$X]“? Why are we continually force-fed the meme that the absence of a tax is a government cost?!

I really don’t understand how normal people swallow this stuff.

Seattle August 30, 2010 at 12:12 pm

It’s because the normal definition of “cost” isn’t the same as the proper one used by economists. To a layman, if I build a burger joint right across the street from an existing one, the customers that come to my establishment is a “cost” to the one that existed before me. Hence, every dollar that is not collected in taxes is a “cost” to the Government.

The reasoning is similar to how bad press can “cost” a business by causing it to lose customers. If you inform people that my burgers are poisonous you’ve stolen from me. In short this all traces back to the IP rights nonsense.

Ryan August 31, 2010 at 8:54 am

I’m not sure I follow you re: the connection to IP, but I’d be interested to hear your reasoning there.

Capn Mike August 30, 2010 at 11:18 am

Because normal people are morons!

BTW, they weren’t BORN that way!

John Brock August 30, 2010 at 3:06 pm

They swallow it, simply because those who feed it to them do a better job at advertising their menu, preparing their meal and delivering it to their table.

Bruce Koerber August 30, 2010 at 3:32 pm

How regulations grow : regulations are assumed to be part of civilized life!!! There is so little confidence in the goodness and wisdom and the resulting continuous improvement of human beings over time. Instead of seeing nobility they (the masses who have been indoctrinated by ego-driven interpreters) see wretchedness.

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