The Unseen Effects of Regulation

Government regulations are costly, not only on the surface, but also in the unseen results they bear.  Regulations, such as various state statutes banning the multiple hook baits known as Alabama rigs, have resulted in the unnecessary expenditure of research and development dollars of tackle companies like Mann’s Bait Company on the exploitation of loopholes that statutes inadvertently create.

While it can be argued from a utilitarian perspective that these statutes have “stimulated” innovation, to what extent could that research and development money have been used on another product that would enrich my life? While the example of a fishing lure seems rather frivolous, it is merely a small example of something  that can be more simply explained than another matter of greater complexity or seriousness to society. In light of my example, couldn’t those dollars have been spent on yet another bait that would spawn the spontaneous order that exists in the fishing lure market and many other markets with low cost of entry and significant lack of intellectual property protections (notably, the garage lure-makers and those who make and sell after-market accessories)?

Had the money that Mann’s spent on skirting the existing statutes to make a bait that will possibly be affected by future statutes been spent on a new concept, there would be a real stimulation, a real demand for products at every level of the market, from components to the final product offered at the local tackle shop. While statutes have created such an innovation, it’s still a market distortion that would not exist had government not intervened to tell anglers what was acceptable to fish with.

Thinking with an economic mindset has made me realize that this exists not only in the world of bass fishing, but in every aspect of the market. It is representative of, as Bastiat mentioned, the unseen that policy-makers do not consider when they write laws or take actions, no matter how well-intentioned they are. For every statute on the books that “created” one product, hundreds more were not created. Entire legal markets wither as a result of bans of certain items or mandates for other items. While these products remain unseen, the lack of employment in certain sectors can be seen. The suffering of families whose income providers were laid off can be seen. The fall in sales of the small-business owner can be seen. At the personal level, our standard of living decreases, or doesn’t become what it had the potential to be. All of this is due to bureaucrats whom are overzealous in telling us that we are better off without something or telling us that we absolutely need something.

I’d like to see a world where Mann’s Bait Company and thousands of small business owners can actually innovate and sell their products without having to concern themselves with such market distortions that ban or mandate certain products. I’d like to see a world where no business has to contend with such regulations and can actually put money into areas where it needs to be placed: inventory, payroll, merchandising, displays, and, the elements that actually stimulate real employment, spending, and innovation. It’s basic morality to allow mankind to design, create, and sell what his mind can conceive; to do otherwise violates his natural right to the fruits of his labor.

Baits like this that only exist to exploit loopholes in statutes are merely market distortions. Had that money been spent on R&D for something organic, there would be a real stimulation and real demand.

Baits like this that only exist to exploit loopholes in statutes are merely market distortions. Had that money been spent on R&D for something organic, there would be a real stimulation and real demand.

Advertisements

The Unseen Effects of the Ammo Shortage

Frederic Bastiat’s famous essay, That Which Is Seen and That, Which is Not Seen, inspired Henry Hazlitt to write Economics in One Lesson, where he applied the lesson  of a careless boy breaking a window, and the net loss that resulted from it, to economic issues beyond the initial scope.  In the same way that Hazlitt applied the aforementioned  lesson to those issues, I will apply it to a market distortion present in today’s world: the shortage of ammunition created by an overzealous Department of Homeland Security.

I do not believe that the Department of Homeland Security has any intention of using the ammunition they bought in a massacre.  Taking such a rash action would have disastrous consequences and swell the ranks of citizens seeking to defend themselves and their property.  That the DHS has depleted the amount of ammunition that civilians have at their disposal is malicious enough of an action.

What is seen is that the DHS has more ammunition than they need – and that factories are working at capacity to churn it out – all the while prices of components have continued to increase as a result of civilian, military, and law enforcement demands.

What is not seen and rarely considered – except by those who are shooters – is that shooting is a perishable skill. While going to the range not only offers stress relief and a good time with friends, it’s also necessary to make sure that I can place my rounds where they need to be. In that I own firearms not only for hunting but also for self-defense, not being able to place rounds where they need to be can be a dangerous proposition to innocent bystanders (if in public) or family members (if in my home). This is especially the case with new gun owners. While I have owned guns for multiple years, I only recently purchased a handgun and have only put 150 rounds through it, due to the shortage that in part was caused by the DHS’s purchase. While I feel comfortable with it, I am not yet proficient.

I am not alone in my story. The same situation is playing out with hundreds of thousands of other new handgun owners who may be permit holders or are seriously considering applying for one to defend themselves in public. What is not seen is that we are all anxious to carry for our self-preservation and, if need be, for the preservation of the lives of others – as has been done in many cases unreported by the national media. Concealed carry of firearms has been shown to deter crime. In a sense, the public depends on those who carry. Furthermore, the public depends on those who carry to be judicious in their marksmanship, something that they cannot do unless they are skilled in the use of those firearms.

The unseen in this situation will be seen. By then, it will be too late and the media will run with it like they did with Newtown. There will be new calls for legislation on the state and Federal level to ban the carry of firearms in public, but our government has a long history of unintended consequences that they later seek to “solve”.

My advice to new gun owners at this point in time is to buy ammunition when you can find it and to do dry fire practice (preferably with Snap Caps). Familiarize yourself with the nuances of the firearm and how it feels in your hand. Practice drawing it. In your home, have it where you can access it immediately, and have clear shooting lanes based on where the rooms of your family members are. While there may be an artificial shortage of ammunition, it can’t stop you from doing basic drills without having to shoot. Do these things and the unseen may remain unseen.