Outline Seven Free to Choose

Rad Sturgis

Who Protects the Consumer?

 Does Adam Smiths invisible hand provide sufficient protection to the consumer
from greed suppliers
 Government regulation has exploded in recent years and free trade is being limited
by it.
 “it took us18 months to build the first nuclear power generator; it now takes us 12
years; That’s progress”
 Milton argues that those things that are regulated by the government have the
lowest satisfaction rate.
Interstate Commerce Commission
 Was put in place to limit the number of different kinds of railways that could be
built.
 Cartels formed and failed because one of the members would undercut the others to
make a quick buck
 The cost to ship something a short distance was greater than the cost to ship
something a long distance. This is due to the fact that the transportation costs were
not the only thing factored in but also the handling costs. The rate to ship something
a short distance would be comparatively more expensive because the actual
transport is only a part of the cost.
Food and Drug Administration
 Arose from a need for clean food and protection from bad medicines.
 At first they did a good job removing many fake cure-alls but now they hinder many
medicines from being sold inside the United States.
 At the time that this was written the United States suffered from “drug lag” in that it
often took a long time for medicines to come to market in the US because they had
to be approved by the FDA.
Consumer Products Safety Commission
 They cover any good that is sold to a consumer except for goods that were already
being regulated by other agencies
 They set bike regulations to insure safe bicycles.
 Do they encourage safer bicycles or do they encourage consumers to become lax and
not informed on the products.
Environment
 Without government regulation, business that are looking to cut costs often do so at
the expense of the environment.
 It was not up until the recent “green movement” that business could charge a
higher price for a good when they stated that it was made ethically or with little
harm to the environment.
Department of energy
  Opec in the 1970’s cut oil production and the US set price celling on oil. This caused
great shortages, as more people wanted the artificially cheap oil then could be
provided.
The Market
 The free market, when there is a wealth of valuable information available is often
better than any government agency could ever be. The problem is that there are
many markets that don’t allow for this kind of self regulation and so must be
government regulated.