Economists often bristle at the term “political economics”. Economics is one thing – it’s about how, in a world of limited resources, people voluntarily fulfill their needs through free exchange and, as a result, create more resources. Politics is something different, and always corrupts economics. The very existence of the “polis” requires money to be syphoned away from the productive market and dumped into non-consensual, non-productive activities.
In other words, “political economics” is really the study of how the state screws up our lives.
For example…
The heavily bureaucratic, gangland-style NY City Council and their big bully pal, Mayor Bill de Blasio, just passed a wonderful little law to, get this, cap “licenses” for ride-sharers in NYC.
Genius.
As Bob Adelman writes for The New American, the law not only limits the number of people who can offer rides for cash in the city, it requires the ride-share companies to pay their employees minimum wage. This in a city where dissatisfaction with the molasses-like speed and insane expense of the tax-subsidized public transit system -- and where anger at how political favoritism has let cabbies keep their prices ridiculously high -- have led to a massive demand for market-based alternatives.
As Adelman notes, in just five years, the number of ride sharing drivers in NYC has more than doubled, because people want to escape the transportation prison built by politicians like de Blasio.
Prior to the new legislation, the free market, the right to contract, and price competition, (were) working wonders. Five years ago there were just 25,000 ride-sharing vehicles operating in the city. Today there are over 80,000 — almost double the number of cabs and livery service vehicles — providing some 17 million rides every month.
This, obviously, is drawing business away from the government-run, taxpayer-subsidized subway and bus bureaucracy, away from the crony-filled government-licensed cab oligopoly.
As a result, the incomes of drivers of traditional (read: government-regulated) taxis has dropped by an estimated 25 percent and, consequently, the price of a medallion to operate a taxicab has also dropped, from over a million dollars to less than $200,000 today. Not surprisingly, many tax drivers have sold their cabs and their medallions and have moved to Uber and Lyft…. The transportation costs borne by citizens needing a ride have dropped, causing the government-operated MTA and the union representing the taxi companies to pressure the city council to do something. And so they did.
Which brings us back to the lesson of “political economics”, or how government screws up the normal operation of supply and demand, impedes the price system that lets consumers show how much they value something, and confounds suppliers’ attempts to increase or decrease the supply based on those signals.
The new law caps for an entire year the number of ride-sharing drivers who will be allowed to drive. This will not only prevent many potential drivers from engaging in rewarding business, it will force many potential customers to use the more expensive, less efficient public system or the fascistically “licensed” cab system, and it will discourage visits to the city, thus harming all kinds of businesses that would have seen folks enter the city if the price-point or time expense were low enough.
Imagine if politicians capped the number of restaurants and grocery stores that could offer food in a geographical area. Since supply cannot rise to meet demand, the price for food will skyrocket, and, at those higher price points, people outside the area will not enter it. In fact, the policy will inspire many local people to get their food outside that area, and it will start a black market, where people in the local area begin importing food and selling it under the table.
Mayor de Blasio might notice the harm the cap on the ride-sharing measure could do, but he seems too busy promoting ideas from the Communist Manifesto, the first plank of which orders the state to abolish private property and, thus, market exchange.
As Adelman notes, last year, Mr. de Blasio repeatedly decried private property and exchange in the leftist New York Magazine, offering drivel like this:
What’s been hardest is the way our legal system is structured to favor private property… I think there’s a socialistic impulse, which I hear every day, in every kind of community, that they would like things to be planned in accordance to their needs.
If only “Bolshevik Bill” had a clue that this is precisely what free markets do for people. They allow individuals to show what they want and need, and allow suppliers to respond and compete, without political intervention steering business to philosophically corrupt, economically backwards, public transit systems or fascistically favored pals in the cabbie union.
If only he had the heart to leave people alone.