Karen, May I add my chip to the discussion between you and Harry? It's really a matter of arithmetic.
Harry has made the point that where a special trade privilege exists a relatively small number of individuals (business people or trade unions) in one particular niche gain a great deal, whereas the much larger number of consumers of its particular product are penalised -- though only by a small amount in each case. The cost of lobbying politicians for a particular privilege -- or in opposing it -- is considerable. Individuals (business people or trade unions) engage in it because, if successful, the pay-off is perceptible and significant to each of them. In opposing a particular privilege, consumers qua individuals wouldn't benefit to the same extent and it requires the most extraordinary efforts by some of them to raise the funds from all of them (or enough of them) sufficient to organise an effective lobby at governmental level. In any particular case the initiative always lies with those who seek special privileges, and the consumer is always fighting -- or trying to fight -- a rearguard action. The result is, as Harry frequently reminds us with cogent examples, is that there are many products and services which are overpriced because special privileges have been granted. Although the over-pricing may be considered to be modest in the case of each product, when all are totted up in the average consumer's weekly/yearly expenditure, then it's considerable. All this has been pointed out by James Buchanan (Nobel Prizewinner 1986), Mancur Olson and others -- the so-called "public choice" school of post-war economists -- and this arithmetic of lobbying costs and benefits is now accepted by most economists who have been trained in the last 30 years or so. I'm sure, too, that almost all politicians -- intelligent people on the whole -- are intellectually convinced of the advantage of free trade but, of course, if a special interest group in their own constituency is claiming a privilege then they're obliged in most instances to support it or else face the possibility of not being re-elected. Keith At 14:36 10/08/02 -0700, you wrote: >Harry, it just doesn't seem that most voters understand the give and take of >free vs protected trade. Either the labor unions take all the blame or the >politicians do when a local economy is affected on the negative side. . . . [etc] ---------------------------------------------------------------------------- ------------ Keith Hudson, General Editor, Handlo Music, http://www.handlo.com 6 Upper Camden Place, Bath BA1 5HX, England Tel: +44 1225 312622; Fax: +44 1225 447727; mailto:[EMAIL PROTECTED] ________________________________________________________________________
