August 31, 2009

The free market trumps the government - empirical evidence

Every conservative worth his or her salt knows that the free market trumps government when it comes to filling needs and meeting consumer demands.  You probably don't need another example of how well the free market works and how poorly the government does when people are put in charge of making decisions best left to the free market.  Nonetheless, some empirical evidence never hurts.  After all, not everyone shares in the enlightenment. Now you probably don't care about the specifics of this example, but don't lose sight of the fact that it is meant to serve as yet one more weapon in your anti-socialism/anti-fascism arsenal.

Back in March of 2009, the municipal government of the city of Toronto, in it's infinite wisdom decided that for a city as ethnically diverse as Toronto, there was a distinct lack of diversity in the a la carte menus of Toronto's street vendors.  There were too many hot dog vendors, and not enough ethnic food vendors, or healthy food vendors.  Keep in mind that Toronto municipal government is very left leaning.  Voter turnout in municipal elections is abysmal.  But the socialists seem to turn out en masse, and the city keeps paying the consequences. Unfortunately, those consequences include the trampling of the free market.

In a city, like any other, with budget issues, transit issues, crime issues, the fact that the city even bothered to consider this 'issue' is a travesty.  Nevertheless they did.  What was the solution? The city announced 8 new vendors (yes 8, in the 5th largest municipality in North America after Mexico City, New York, L.A., and Chicago) that would serve Thai, Afghani, Persian, Greek, Middle Eastern, Eritrean, Korean and Caribfusion fare.  Not only that, they mandated where each type of food would be sold - at various locations around the city. Talk about micro-managing.  Of course in addition, the vendors each had to pay a registration fee of $25,000 to $40,000 for licensing to be in the program.  Clearly the whole approach is antithetical to free market solutions to the problem.

Don't forget, any street vendor could, in their application for a license, include the specifics of what they planned to offer outside of the hot dogs.  The free market has ensured that the city's needs are being served: there's a reason vendors sell hot dogs and sausages - it's what sells!  Meanwhile vendors complain that they are choking on the red tape.  It also appears that not many vendors are pounding down the door to get in on the program.

The real issue, though is that many of the vendors are experiencing, shall we say, less than brisk sales.  Since the government has taken away the free market approach to hot dog street food vendors, the free market is still acting rationally and people are looking elsewhere for their eats.  Like I always say, you can pretend supply and demand don't exist, but they are real.  Government interference in the free market ALWAYS causes more problems than it solves.  And it doesn't seem to matter how many times you tell the sophisticated intelligensia, they don't seem to get that the free market is smarter and more responsive than them. 

The lesson is obvious - keep the government out of the hot dog business, let the free market handle the heavy lifting.  The inference is even more important - keep the government out of health care.  If they can't manage the simple hot dog business then what could possibly lead anyone to believe they can do any better in the complex health care field? You listening President Obama?

UPDATE: Just to prove that it's not about the food ethnicity, in Portland Oregon the ethnic food carts are thriving. It isn't about the food, it's about the interference.

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