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The full dope on the costs of regulation

Summary:
A standard point made about markets is that there must be regulation. Bureaucratic such, standards and methods and rules must be the same across all participants in order for the market to work at all. We see this in European insistences about access to the Single Market. We see it often enough in more domestic settings too. Only strong central control can create the level playing field necessary.We, contrary as we are, insist the opposite. Rather the point of markets is that the playing field isn’t level - what is comparative advantage if it isn’t an insistence that we’re not all starting from the same point? Leaving such theoretical issues aside, we can also observe the effects of regulation out there in the wild. Well, sometimes we can. It’s not all that often that we can see a large

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A standard point made about markets is that there must be regulation. Bureaucratic such, standards and methods and rules must be the same across all participants in order for the market to work at all. We see this in European insistences about access to the Single Market. We see it often enough in more domestic settings too. Only strong central control can create the level playing field necessary.

We, contrary as we are, insist the opposite. Rather the point of markets is that the playing field isn’t level - what is comparative advantage if it isn’t an insistence that we’re not all starting from the same point? Leaving such theoretical issues aside, we can also observe the effects of regulation out there in the wild.

Well, sometimes we can. It’s not all that often that we can see a large and functioning unregulated market operating alongside one regulated for the same goods. One of those sometimes is cannabis in the newly legalised areas:

The consensus on Vancouver’s cannabis-focused Reddit feeds is that the legal market is struggling to attract buyers because its product is more expensive but lower in quality than the black market alternative.

This is not a good advertisement for the merits of regulation.

“The government’s pot is too expensive. The government doesn’t show you a picture of what you’re buying before you buy it, so you cannot be informed as a consumer. The government weed has been full of bugs, mouldy or too dry in some cases, and often takes too long to get there,” one user said.

“The legal stuff is garbage,” said another Reddit user. A third said: “Friends don’t let friends smoke government weed.”

That’s not a good one for the merits of the government provision of an item either.

Government regulation, making things worse and more expensive. That being an impressive double achievement as there are few things that manage both at the same time.

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Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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