A Concrete Case of Unintended Consequences

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Free
market advocates often refer to the danger of "unintended consequences."
They warn that prohibitions, regulations, and licensing schemes
— for all the alleged good they will do — can have negative side
effects.

It's
impossible to know every possible consequence. A few are
suggested; mostly I try to point out the general foolishness of
government micromanagement.

In
the February 2007 issue of Freedom Daily, published by the
Future of Freedom Foundation, my commentary "Taxicab
Absurdity
" addressed my local government's ridiculous policy
of aggressively targeting and harassing unlicensed taxicab operators
within the city limits of Portsmouth, New Hampshire.

Considerable
energy, resources and manpower are being employed to reassure a
trembling public — apparently in need of constant reassurance —
that this menace will not be tolerated!

Words
like "crackdown" and "sting" were used in a
riveting November 30 story in the Portsmouth Times describing
the threat and the important service being provided by our local
police department in combating it. The news story reported that
the "now defunct" Lighthouse Taxi Company was "busted"
in 2005 for the heinous crime of "picking up a passenger at
a local hotel and taking the person to the airport."

"No
mention of how licensing ordinances such as this one — a protectionist
racket if ever there was one — actually contribute to a company's
becoming u2018defunct'," I wrote in response.

Look
past all the altruistic fanfare that surrounds licensing proposals
and it's not hard to see that limiting competition is often a major
motivator — and limiting supply is always the result. This works
out well for those who can pay all of the fees and jump all of the
bureaucratic hurdles, but the rest of us pay a higher price, usually
in the form of steeper fares and poorer service.

Imagine
my lack of surprise, then, when I saw the following in the July
13 issue of It's Portsmouth, another community paper, in
a story titled "City bars want help policing drinkers":

"More
than 50 city restaurant and bar owners who met with city police
and a State Liquor Commission representative Monday will form a
group to work closely with police to solve problems associated with
intoxicated customers," the paper reports. "The restaurateurs
and bartenders said they try to make sure those who are intoxicated
take taxis. However, they said, there are not enough taxis in Portsmouth
to take people home from the bars at closing time"!

Portsmouth's
central planners harass and run out of business taxi operators who
are just trying to make a living providing a truly valuable service
— and then wonder how an important demand is not being satisfied.
People ought to be responsible, and avoid drinking and driving.
The best way to do that is to take a cab, and the market was providing
plenty of those before City Hall got in the way.

The
next time some boozer looks around in vain for a taxi and then drives
home instead, thank the Portsmouth City Council and Police Department.
By limiting supply, the city government encourages drunk driving
and makes the roads less safe for everyone. The price of taxi service
just went up some more.

July
16, 2007

Scott
McPherson [send him mail]
is a policy advisor at The Future of
Freedom Foundation
in Fairfax, Virginia.

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