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Why Lovers of the State Hate Uber

Written by Gary North on October 3, 2015

The regulation by the state of the streets of London goes back to 1635. It began under King Charles I, who was a full-time tyrant, and whose life ended on the scaffold in 1649.

Charles decided that the streets were too crowded in London, and what the city needed was government control over the number of taxis. This tradition extends to today. In major cities, the government regulates the supply of taxis, and the result has been higher prices and rotten service. Regulation has created an oligopoly of taxi companies, which use state power to extract greater wealth from people who want to hire a taxi cab.

This, of course, is heralded by those people who believe that the state must be invoked to regulate virtually all of our lives. I came across an article recently written by such an individual. It appeared on a site dedicated to international regulation of the economies of the world: www.theglobalist.com. The site never explains how this can be done without a world government with the power to enforce its regulations. The article was titled: “Rethinking the Uber Vs. Taxi Battle: How Uber could be part of the solution (instead of embroiled in controversy)”. The assumption is that Uber isn’t the solution.

The author is the author of a forthcoming book. The title tells all: Raw Deal: How the “Uber Economy” and Runaway Capitalism Are Screwing American Workers. You get the idea. He hates the free market. He hates Uber because Uber is making a profit at the expense of the politicians and their state-created oligopoly, the taxi industry.

FREE FOR ALL

He begins by describing the free market as a free-for-all. In fact, it is the state that provides the free-for-alls: toll-free roads built by the state with tax money. As with all such state-funded enterprises, there is greater demand than supply at zero price. This is known as the tragedy of the commons. It is the inevitable outcome of the state policy to provide something free for all. I wrote an article on this back in 1973: “The Free-for-All Society.” It was short. You can read it here.

Surge management vs. free-for-all

However, this history also shows that many of these regulations were enacted for good reasons. Certainly careful study should be conducted to figure out the causes of the recent surge in traffic congestion in San Francisco, New York City and elsewhere.

This would lead to more definitive insights on how much ride-sharing really contributes to congestion — or how much of that is the expected result purely of a growing economy.

Looking back at history, what has often driven regulatory interventions is the proliferation and resulting chaos of having too many vehicles on the road.

With ridesharing’s popularity, it’s not hard to imagine how this still relatively new service could eventually result in city after city returning to the “good ol’ days” of too many drivers, not enough safety and inadequate consumer protection.

Ah, yes: “inadequate consumer protection.” Protection by what? By the state. This always produces oligopolies, higher prices, and reduced service. It is the ultimate protection racket.

(For the rest of my aryicle, click the link.)

Continue Reading on www.garynorth.com

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