Monday, August 13, 2012


Cartels are evil.  We all know that.  

Cartels are when businesses form secret alliances to keep prices high and thereby screw the consumer.  Watch the nightly news and you're bound to hear of such horrid business practices within the hour.

The trouble is, cartels fall apart in free markets… despite people’s fears of the cartel, someone always  undercuts the cartel.  This is the joy of a free market: When a business offers a better product or service at a better price, with more convenience, or a trend-setting style, members of the old guard are undercut.  Markets change.
Established businesses have a choice: innovate, delay, or die.  Cartels are one of the forms of delay.  Others include brand loyalty ("My daddy always bought a Chevy"), long term contracts ("Two year contract with free phone upgrades!"), or preventing competitors from entering the market (licensed hair-stylists, electricians, guilds, and other forms of certification of products/businesses/individuals to enter into business or trades).

Such associations, standards, and certifications are, in fact, crony capitalism where the government and businesses form a much more powerful (yet legal!) cartel for the “protection of consumers.”  

If you hear that phrase, check your wallet. Cartels are evil, remember?  Especially when infused with the power of law.

Did you think it wise to keep church and state separated?  Why not business and state? How about limiting government's role in business to enabling (as distinct from encouraging, tax-incenting, and subsidizing) it?  How about limiting business's role in government to paying taxes?

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