The Free Market and Consumer Protection | Murray N. Rothbard

The Free Market and Consumer Protection | Murray N. Rothbard.
Standards of quality and safety are favourite arguments for licensing laws and other types of quality standards used by governments to protect consumers by ensuring that workers and businesses sell goods and services of the highest quality.
The answer of course is that quality is a highly elastic and relative term and is decided by the consumers and their free actions in the marketplace
The consumers decide according to their own tastes and interests and particularly according to the price they wish to pay for service.
It may very well be, for example, that a certain number of years’ attendance at a certain type of school turns out the best quality of doctors although it is difficult to see why the government must guard the public from unlicensed cold cream demonstrators or from plumbers without a college degree or with less than 10 years’ experience.
But by prohibiting the practice of medicine by people who do not meet these requirements, the government is injuring consumers who would buy the services of the outlawed competitors, protects qualified but less value productive doctors from outside competition and also grants restriction to the remaining doctors.
It is hardly remarkable that we hear continual complaints about a shortage of doctors and teachers but rarely hear complaints of shortages in unlicensed occupations.
Consumers are prevented from choosing lower quality treatment of minor ills in exchange for a lower price and are also prevented from patronizing doctors who have a different theory of medicine from that sanctioned by the state approved medical schools.
How much these requirements are designed to protect the health of the public, and how much to restrict competition may be gauged from the fact that giving medical advice free without a license is rarely a legal offense.
Only the sale of medical advice requires a license since someone may be injured as much if not more by free medical advice than by purchased advise.
The major purpose of the regulation is clearly to restrict competition rather than to safeguard the public.
Other quality standards in production have an even more injurious effect.
They impose governmental definitions of products and require businesses to adhere to the specifications laid down by these definitions.
If the government defines a product in a certain way, it prohibits change.
A change to be accepted by consumers must be an improvement either absolutely or in the form of a lower price.
Yet it may take a long time if not forever to persuade the government bureaucracy to change the requirements.
In the meantime, competition is injured and technological improvements are blocked.
A proper consumer protection in a free market society is that which is based on principles of law of contract.
Consumers buy goods and such transaction is regulated under law of contract. A seller is liable to the buyer if a product sold or bought is not what it was advertised or said to be. In such cases a buyer will approach relevant authorities to institute any legal proceedings against a buyer. This is regulated by a contract since a relationship between parties is a contractual one. Government does not have to intervene is such instances, it only has to provide a mechanism through which parties should follow for dispute resolution.

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The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation.

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