The Real Injustice

The worst thing about government regulations is that they pit otherwise decent-minded people against each other. For example, some of the most ardent supporters of immigration restrictions are immigrants themselves who have been through the bureaucratic nightmare of applying for residency or citizenship. They resent those who have successfully skirted the law. Rarely, if ever, will they question the legitimacy of the law itself.

Government keeps us at each other's throats, lest we figure out who our true oppressors are and send them to the guillotine.

An area businessman, John Palreiro, owner of Great Bay Taxi, has accused two cab companies of keeping taxi medallions while not operating the cabs to which those medallions were assigned, creating an artificial shortage. Meaning Palreiro can't get a medallion, and therefore cannot compete with established taxi services. "The city of Portsmouth should not be exposed to underhanded tactics to hold/hide any medallion," Palreiro wrote to city officials.

As this story in yesterday's Portsmouth Herald shows, Mr. Palreiro has done a great deal of research into these other company's activities, and has concluded that he is being treated unfairly. Taxi Commissioner Mike Barker said that these complaints contain "serious allegations", and City Attorney Robert Sullivan will be working closely with the Portsmouth Police Department to investigate.

Unsurprisingly, another local cabbie, Dan Bigda, is not sympathetic. He "disputed the assertion that there's a need for more cabs in Portsmouth," the story reports. How nice of him to reach that conclusion for the rest us!

But isn't that precisely what the Taxi Commission does -- decide whether there's a "need" for more cabs?

If Mr. Palreiro's allegations are true we can appreciate his outrage. But he has misdiagnosed the problem. Someone, like himself, who wants to operate a cab should not have to endure arbitrary, bureaucratic limits being placed on his right to do just that.

Local governments all over this country micro-manage cab companies by granting or withholding these highly-coveted "medallions" under the pretense that politicians and bureaucrats have some idea what the correct number of taxis should be. They do not. And the prevalence of such busybodies should not be mistaken for justification. Cancer doesn't become less dangerous because it has spread around.

Another issue here is "Regulatory Capture". When a regulatory agency is created to oversee an industry -- always for the "public good", of course -- there is a tendency for said agency to become dominated by the interests it is supposed to be regulating. Far from resenting the regulations, firms come to embrace these controls because they impose barriers to entry and unaffordable costs on competitors and potential competitors. In other words, regulating agencies often, if not always, come to serve not the "public good" but the economic interests of the "regulated" firms -- at the expense of consumers, smaller competitors, and start-ups.

The problem is not the withholding of medallions, but the existence of these wretched medallions in the first place. Henry David Thoreau said, "There are a thousand hacking at the branches of evil to one who is striking at the root". Mr. Palreiro is no doubt suffering an injustice. Its root is the Portsmouth Taxi Commission.