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John Stossel
John Stossel
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Keeping Business Honest


Instinctively, we look for people's motives. We need to know whom we can trust and whom we can't. We're especially skeptical of business because we know business wants our money.

It took me too long to understand that business's desire for profit is a good thing. To get our money, businesses — if they can't look to the government for favors — need to give us what we want. Then they must make continuous improvements and do it better than the competition does.

That competition is enough to protect consumers. But that's not intuitive. It's intuitive to assume that competition isn't really consumer protection and that experts at the FDA, FTC, DEA, FCC, CPSC, OSHA and so on must protect us. These experts consult "responsible" businessmen for advice on creating rules to make sure businesses meets minimum "standards."

Unfortunately, this standardization stops innovation.

We are imprinted to be wary of newcomers, strangers. Newcomers by definition are less experienced. Maybe they'll do something unsafe or dishonest! We don't want government to stop them from doing business — we just want consumers protected! Governments claim to do that by licensing businesses.

People like the idea of licensing. We license drivers. We license dogs. It seems prudent. People naively think this government seal of approval makes us safer.

This naivete is used to justify all sorts of rules that kill competition.

Las Vegas regulators require anyone who wants to start a limousine business to prove his new business is needed and, worse, will not "adversely affect other carriers." But every new business intends to beat its competitors. That's the point. Competition is good for us. Las Vegas' anticompetitive licensing rules mean limo customers pay more.

In Nashville, Tenn., regulators ruled it illegal for a limo to charge less than $45 a ride. One entrepreneur had won customers by charging half that, but the new regulations mean the established car service businesses no longer have to worry about him.

Perhaps Nashville's and Vegas' regulators really believe "this is an area where the free market doesn't work," as the manager of the Nevada Transportation Services Authority put it. But it's fishy that charging big fees for licenses just happens to be a very effective shakedown operation.

Vegas cab and limousine businesses give "substantial" donations to Vegas-area political candidates, according to the Las Vegas Sun.

Our big government has justified its existence (at least since the Progressive Era) by claiming it is a "countervailing influence" to corporate power — when it is, in fact, incestuously entwined with corporations.

The list of business activities that government insists on licensing, supposedly for our sake, includes hair braiders in Mississippi, wooden-casket makers and florists in Louisiana and even yoga instructors in Virginia.

Established businesses always try to use government to handcuff competition. When margarine was first developed, the dairy industry got Wisconsin legislators to pass a law making margarine illegal. Several states ruled that margarine was "deceptive," since it might be mistaken for butter. Some required a bright pink dye be added to make margarine look different. An "oleomargarine bootlegger" was thrown in the U.S. Penitentiary at Leavenworth.

When supermarkets were invented, small grocers tried to ban them. "A&P will dominate the grocery business and destroy Main Street," the grocers claimed. Minnesota legislators responded by passing a law that forbade supermarkets to put food "on sale."

Established capitalists are often capitalism's biggest enemies.

I used to believe that licensing doctors and lawyers protected consumers, but now I realize that licensing is always an expensive restraint of trade. It certainly hasn't barred quacks and shysters.

Licensing is unnecessary. It creates a false sense of security, raises costs, stifles innovation and takes away consumer choice.

I don't deny that there is fraud in business. I won Emmys for exposing it. Fraud is one of three crimes that must be policed and punished for the market to function (theft and physical assault are the others). Once that's done, however, as long as there is open competition, honesty pretty much takes care of itself.

Free competition — the striving for a good reputation — protects consumers better than government ever will.

John Stossel is host of "Stossel" on the Fox Business Network. He's the author of "Give Me a Break" and of "Myth, Lies, and Downright Stupidity." To find out more about John Stossel, visit his site at <a href="" <>></a>. To read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at




5 Comments | Post Comment
Dear Mr. Thomas Jefferson:
The Crown has received and has read
Your submitted Declaration
On Independence, quaintly pled.
Please be advised the Crown requires
Proper due licensing and fees
To declare against the Empire's
Strangle hold on the colonies.
Please submit to the alphabet
Agencies and bureaus for forms
Re making a declaring threat.
Enclose proper bribes per set norms.

We take pride in polite shakedown.
Sincerely yours, The British Crown.
Comment: #1
Posted by: Ima Ryma
Wed May 23, 2012 1:19 AM
Personally I am bit leery of discontinuing the licensing of doctors and dentists. Granted the market will weed out the bad ones but what if YOU are one of the early customers who suffers because there wasn't at least a minimum set of standards that licensing provides. "Board Certification" might solve the problem if all doctors and dentists were required to be "Board Certified" before they could start practicing. That would at least get licensing out of the governments hands but it might still cause issues as the medical community has shown its reluctance to punish the bad players.
Comment: #2
Posted by: Aardvark
Wed May 23, 2012 11:17 AM
J.Stossel continues to impress me. I used to find him too conservative but now I am finding his ideology to be a serious alternative to the 2 dominant parties. If John doesn't run for the 2012 presidency, I want him to train me to do so. I love freedom, fairness, and opportunity and we all deserve more of it.

Shane Gerzon-Kessler
Tunica, Mississippi
Comment: #3
Posted by: shane gerzon
Wed May 23, 2012 3:04 PM
Stossel's common sense approach never seems to be swayed by politics or which news network is writing his checks. He stands on his own two feet and has his own moral compass. On every issue, he actually takes time to think. We need to create a new politics based on this. Millions will gravitate toward these ideas that refuse to be swayed by extremism. Let's not wait any longer. Contact me or John if you want to join. I'm ready for this now!

Shane Gerzon-Kessler
Tunica, MS.
Boulder, CO.
Tel Aviv, Israel
Comment: #4
Posted by: shane gerzon
Wed May 23, 2012 3:13 PM
even fraud shouldn't be illegal. it will be much harder to deceive anyone if they know that no one will protect them from their own bad decisions.

we need protection from physical force (violence) and coercion. but we need to be free to make our own bad decisions, including being defrauded.

what will replace the laws against fraud? REPUTATION!!. reputation used to be the business man's most important asset. without a good reputation, he'd be out of business. a good reputation isn't as important now because people believe that the government will protect them. all too often it doesn't.
Comment: #5
Posted by: Tpartyforever
Sun May 27, 2012 10:33 PM
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