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Current Events » in reply to Leave It To The Private Sector Is Tom's Mantra

re: Leave it to the private sector whenever possible is Tom's mantra

I'm not an anarchist, but there's one hell of a lot of things being done by the government that don't need to be. This is hard to convince people of. I think a large part of the reason for this is rampant ignorance on how market processes work, and maybe the sense that the current way must be the only possible way.

In the current context, we are talking about inspecting grain, or meat, or in some way certifying products as safe and/or effective. A large number of government organizations do this, but each function is held by a single organization. Who watches the watchmen? That corruption in a government inspection process is possible is confirmed by David's anecdote. Where do you turn then?

As with many other things (not all, but many) that government does, there is no reason private organizations could not accomplish this kind of function. Even in the present environment of near-monopoly in this field on the part of government, there are a few such entities. Underwriters's Laboratories and Consumer Reports come to mind.

In a free-market society, there could be many such organizations, with testing labs, inspectors, research groups, and other resources.

Manufacturers or others who wanted to impress their customers about safety would voluntarily be inspected and "stamped" by such consumer protection organizations (CPOs), for a fee. Such CPOs would have competitors in the field. Each, naturally, would be trying to show themselves as incorruptible and effective, and at the same time naturally, be watching like hawks for dirty hands or lax procedures on the part of their competitors. A CPO, once caught taking a bribe or something, would be hounded out of business by competitors and customers. Imagine what would happen to Consumer Reports if they were caught taking money to "fix" a rating.

Their good name would be their life's blood.

Try that on a Federal inspection system.

Products who really want to show themselves in a good light might have themselves certified by more than one outfit. Consumers would look for the stamps of well-known CPOs. The market would select for honest inspectors, and for products inspected by them.

Historically, this kind of thing was actually beginning to develop, associations and the like, when the idea that this should be a state monopoly became popular.

A lot of liberals are convinced that businessmen around the world stay up nights thinking of ways to cheat and kill off customers. At the same time, somehow the government bureaucrats assigned to protect consumers from these fiends are not men, but incorruptible angels.

Competition and informed customers weeds out the bad, and encourages the good. True for all human economic activities.

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