Scenes from the Political Economy: Scooter Regulation in Panama City, Florida
By Art Carden
I like free markets and don’t like politics largely because free markets feature better incentives than the political arena. I came across a vivid example while vacationing last week. While flipping through the channels on TV, I came across what was apparently a local public hearing about new regulations on the rental scooter industry in Panama City, Florida, where we were staying. I don’t know the details of the issue, but a few things struck me while I was watching parts of this hearing.
First, there were several speeches by people in the scooter industry. They did a good job, but it was clear that they were not full-time public speakers. These were salt-of-the-earth folks with a comparative advantage in running scooter rental businesses, not saying eloquent and flowery things in a public forum.
Second, I was struck by the spectacle of seeing people basically have to go before a local council and plead for their livelihoods. All else equal, I’m glad they had the option of questioning and resisting imposed regulatory standards through fairly peaceful channels.
Third, new regulations are a pretty heavy-handed way of dealing with a problem, which is presumably drunken Spring Breakers causing trouble on rented scooters. One of the speakers discussed the contracts his renters have to sign, and another talked about the instruction they give in safe and responsible operation. Nonetheless, problems still emerge. This seems like a problem that can be handled by the court system without the need for regulation.
Fourth, I found council members’ and voters’ incentives to be pretty interesting. A problem with politics is that it allows you to impose huge costs on others at a very small cost to yourself. Let’s suppose the proposed regulations are a mistake. The owners of the scooter companies might have their lives wrecked, but what price do voters and council people pay for making a mistake? In a world where voters are rationally irrational, the price is probably going to be pretty low. Voters get the satisfaction of knowing that Something Was Done about the problem, and the members of the council get to go to their constituents and say they Did Something About the Problem. Note that this doesn’t require malevolence on anyone’s part. All you need for a perverse outcome is perverse incentives.
Bryan Caplan explains anti-market bias in a LearnLiberty video. He also discusses his book The Myth of the Rational Voter in a 2007 EconTalk podcast.
Obligatory disclosure: I’ve been paid to appear in LearnLiberty programs, but not to blog about them.