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Removing restrictions on economic liberty
Timothy Sandefur is an adjunct
scholar at the Cato Institute and the lead attorney for the Pacific
Legal Foundation’s Economic Liberty Project, which defends
businesses against onerous regulations. His new book, The
Right to Earn a Living (Cato), catalogs the ways
government restrains even the most basic economic activities.
reason asked him to list three especially
pervasive interventions that make it harder for Americans to do
business:
1 Professional licensing requirements. Licensing is often touted as necessary to protect the public, but established companies frequently exploit it to bar potential competitors. These expensive, time-consuming mandates, which do little to protect consumers from incompetent or crooked businesses, apply to professions as diverse as florists, barbers, and pest control workers.
2 Certificate of Necessity laws. These laws force entrepreneurs to prove to bureaucrats that a new business is “necessary” before they can open its doors. But the only way to prove there’s a market for a business is to try it. If Starbucks had been required 20 years ago to prove America needed a new coffee franchise, it couldn’t have.
3 Minimum price requirements. Often appearing in the form of antitrust laws, these rules frequently punish businesses that cut prices with the intent to compete. Such laws keep prices unnecessarily high and encourage existing businesses to waste money suing one another instead of improving their products and services.
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