Consumers are never told whether promised benefits materialise or how much they cost. Calling something “consumer protection” conceals price and choice effects. Asked whether they want to decide what to buy and pay, consumers say “yes”. Asked whether they want protection from inferior products and high prices, they say “yes”, without realising the contradiction. Asked whether everything should cost more, they say “no”, without realising how much government interference inflates all prices.
Leon Louw is executive director of the Free Market Foundation and his latest column Rule-of-law fighter Zuma should now turn to FSB first appeared in BDlive today and here are some extracts.
PRESIDENT Jacob Zuma’s chorus of critics never expected him to lead the charge for constitutionality and the rule of law. His rejection of the Mineral and Petroleum Resources Development Amendment Bill compares with Nelson Mandela’s rejection of unconstitutional bills passed by his party, Cabinet and Parliament. After considering submissions that officialdom and politicians ignored, Zuma concluded that the bill did not “pass constitutional muster”. It “elevates” codes and charters “to the status of national legislation”; the minister may bypass “constitutionally mandated procedures”; it is “inconsistent” with treaties; the legislature “did not sufficiently facilitate public participation”; and it “allows” entry without consent.
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In addition to demanding constitutionality and the rule of law, Zuma could end the deceitful habit of implying that government interference protects consumers from suppliers, when virtually every measure not only reduces consumer choice and the benefits of innovation, but raises prices. Typically, the net effect of controls is to harm consumers, especially the poor. The problem is compounded by the lobbying capacity of powerful vested interests. Calls by bureaucracies such as the FSB for unbridled power and wealth are admissions of failure. Supposed problems are what earlier measures were meant to fix. Promised solutions follow alleged problems to be solved by enlarged bureaucracies, which report the same problems in need of further enlargement, and so on infinitely.
Zuma’s principled stand against bad law may be his first, not his last, to which end he deserves praise and encouragement.