Economic Growth

Myriad Vague and Selectively Enforced Laws Are Not Ideal for Economic Growth


Yesterday evening I appeared on The Blaze's RealNews discussing how government's expansive scope leads to arbitrary and selective enforcement of myriad vague laws. We discussed the example of Gibson Guitars, previously reported by ReasonTV's Anthony Fisher. Dressed in swat team gear with automatic weapons, federal agents twice raided Gibson Guitar's Nashville and Memphis factories, seized half a million dollars worth of property, shut down the factory, and charged the company with violating the Lacey Act, a law that bans the importation of rare and endangered plants and wildlife.

Naturally some concluded Gibson Guitars had imported endangered wood from India to be used for electric guitar's fret boards. However, CEO Henry Juszkiewicz, argued that the real issue was whether the wood, when exported from India, was the correct level of thickness and finish to ensure the exported wood included some labor content from India.

If Juszkiewicz, is correct, then the law enforced is not one protecting endangered wood, but trade protectionism and labor law, enforced via the Lacey Act. Although Thomas Stackpole at The New Republic did not intend to pillory the Lacey Act, he clearly explains support from domestic special interests for a law that ostensibly enforces some foreign laws:

"a number of American industries are in favor of ongoing Lacey Act enforcement. The health of the American timber industry, for example, is highly dependent on the Lacey Act Enforcement…the illegally harvested lumber that has flooded the global market as a result has driven down the price of timber, making American lumber less competitive both at home and abroad."

The point I make on the panel is that when there are many vague and potentially far-reaching laws on the books it leads to selective and arbitrary enforcement of laws. Uncertainty with what laws are on the books, how those laws are interpreted, and how they will be enforced is not the ideal recipe for a thriving economic climate.

Follow Emily Ekins on Twitter @emilyekins

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  1. It’s not our responsibility to protect India’s endangered trees. If they wanna chop em all down, it’s their long-term loss in exchange for their short-term gain.

    Oh, but I forget, only America gets the privilege of National Sovereignty.

  2. So they’re trying to make sure that the finishing work on the wood is done by Indian workers, not Americans? That’s a bizarre form of protectionism.

  3. I’m getting a “This video is private” message. Is there a link with a watchable video.

  4. Regardless of Indian trade-protection law, how the hell did we get to the place where US law is used to protect another country’s resources?

    If Gibson were importing live plants, there would be an argument regarding the US environment – although I highly doubt rosewood would be an invasive species ala kudzu or Asian carp.

    If India wants to protect their rosewood plants, that is India’s job, not the US’s. Unless Gibson employees went to India to harvest the wood themselves, Gibson didn’t break any Indian laws.

    1. And that was always part of the issue. The bullshit is entirely on our side of teh transaction, and even the Indians saying no laws were broken is insufficient proof in the eyes of DOJ.

    2. As far as I can tell, it was an extension of the Lacey Act with the well-intentioned if not terribly well-thought-out purpose of trying to ensure American companies weren’t dealing in other countries’ endangered species. The 2008 amendment to the Lacey Act says that you’re not allowed to import any plant or plant product if that would violate foreign law. As a matter of enforcement, plant products have to have an import declaration that says what they are, where they’re from, etc.

      That is where we get to the part that Gibson was accused of violating, at least for the Indian wood (I am less familiar with the Madagascar part). The Indian export declaration, the customs form, and the Lacey Act declaration form all state slightly different things about what the wood in question was. And that’s really about it as far as the Indian wood goes. Gibson was subject to an armed raid and about a million dollars in losses because of bad paperwork.

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