Author: Timothy Sandefur
George Will’s latest column focuses on the right to earn a living, and the many ways government deprives people of this right to serve the interests of politically influential, established industries, and he mentions several PLF economic liberty cases:
In the Cato Institute’s journal Regulation, Timothy Sandefur of the conservative Pacific Legal Foundation examines how “certificate of necessity” (CON) laws stifle opportunity and competition. For example, Michael Munie of St. Louis has a federal license for his moving business to operate across state lines, but when he tried to expand his business to operate throughout Missouri he discovered that state law requires him to somehow prove in advance that there is a “public need” for his business outside St. Louis.
Who, Sandefur wonders, could have proved 20 years ago that Americans would support a nationwide chain of coffee shops called Starbucks? And in 1985, experts at Coca-Cola thought they knew the public wanted New Coke.
CON laws began with early-20th-century progressives who, like their ideological descendants today, thought that resources should be allocated not by markets but by clever, disinterested experts — themselves.
As Sandefur says, the toll on opportunity is obvious: “Requiring an unknown dreamer, with no political connections, reputation with consumers, or allies among local business magnates to persuade a government board to let him open a new business can often be a prohibitive cost.”
Such laws often are explicitly biased against new businesses. In Illinois, someone wanting to open a car dealership must get a certificate from the Motor Vehicle Review Board, and if any existing dealer objects, the board must consider, among other things, “the effect of an additional franchise .?.?. upon the existing” dealers and “the permanency of the investment of the objecting motor vehicle dealer.”