“Timid men prefer the calm of despotism to the tempestuous sea of liberty” – Thomas Jefferson
When I was in college I worked for a fellow church member, washing cars on Friday & Saturday. I didn’t make a ton of money, starting at $7/hr and moving up to $9/hr – but it was enough to pay the bills and I really enjoyed working with him. It later came that he moved to San Antonio and left the business in the hands of another associate, with whom I had a less-than-great relationship. I stayed on for a while, wanting to help my friend’s business along as he had gone to San Antonio to start a new church. But, eventually, the working relationship just wasn’t there and I moved on.
Toward the end, my new boss had even indicated an unhappiness with my work, demanding that for $9/hr I needed to produce at least $27/hr in revenues. (I generally produced near $20/hr.) Having at least a modicum of understanding of business workings, the notion seemed silly. I worked just as much with the customers as he did and could easily have taken many with me had I chosen to split off. I was proficient with all aspects of our car washing business. The only remaining barrier to entry was the capital investment required to buy a bucket, sponge, soap, wax, and some Armor All. There was nothing standing in the way of starting my own business and taking half of his customers other than the Golden Rule and a general lack of interest in standing up my own company. (I soon began teaching at a local community college.)
Barriers to entry in the car washing business are minuscule. As such, you really don’t see any car washing cartels out there. To the extent that there are chains, they exist because of efficient processing, not barrier to entry.
Today, former President of Mexico Vicente Fox made headlines by renewing his call to legalize drugs in Mexico. His home country has become something of a failed state. Law and order are utterly corrupted, subject to the whims of the drug cartels. The citizenry is not safe. Just as in many urban American environments, young kids feel safer, more a part of society, more empowered if they join the cartels rather than hold to law and order.
While I haven’t read all of Fox’s machinations on the subject in detail, I generally agree with Fox’s argument. Criminalizing drug production and use has given rise to brutal and powerful drug cartels, just as alcohol prohibition gave strength to organized crime in America (most notably Al Capone).
Think of what would happen if we legalized drug use and production in the US. Every John Doe with a backyard could produce marijuana or cocaine. Other high profile drugs may require chemical engineering, but if that process were managed in the open with proper facilities it would be safe and cheap. The profit margin would be wiped out overnight. (Side note, those who hate the “evils of profit” really ought to support the free market, which is the most ruthless eliminator of profit the world economic system has ever known.)
As the profit margin vanishes, the ability of cartels to hold power through brute force will disappear too. The people will be free from this invalid force of rule by criminals.
Would we see a rise in drug use? Maybe. I’d say it’s better than a 50-50 proposition. A proposition that doesn’t please me – I’d rather there was no drug use at all. But, the current system has not led to a happy drug-free environment and has a ton of painful “unintended consequences.”
It seems like the impact of barriers to entry extend beyond my car washing and the Mexican drug trade. Incentive implies that big business (whether legitimate or illicit) and big government would gladly cooperate to erect barriers to entry. When the barriers are high enough, only the big, organized corporations (whether businesses or cartels) will have the necessary infrastructure and resources to bribe government officials and maintain their profit margins. Government officials have no problem with this, of course – they like getting bribes. Seems that both would have something to lose from expanded freedom. The cartels lose the system that has made them tons of money, losing the massive investment in government bribes in the process. Officials lose the gravy train of bribery and fall into the fickle hands of, [gasp], the people.
Perhaps it is time we, the people, demand that the government remove the freedom barriers they’ve erected to control us – before something even worse happens to us.
As for Vicente Fox, we wish him well. Our country has been corrupted by big government and big bribery from big business. His country is being torn to shreds by cartel violence. They’re fighting for survival.