David R. Henderson  

Supply Management or Cartel Enforcement?

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The question is not whether to manage supply but who is to manage supply? Should producers of milk, eggs, cheese, and poultry be allowed to manage their supplies or should marketing boards, using the power of the state, do it for them?

If producers are free to manage supplies, then we get healthy competition, with the results that usually come with competition, one of which is lower prices. If governments manage supplies, then, when the government restricts supplies, it is essentially enforcing a cartel. The result is higher prices.

I propose that opponents of supply management by government--and I am one of those opponents--use a more accurate term for what they oppose: cartel enforcement.

Not only is the term "cartel enforcement" more accurate, but also it evokes a negative, and completely justified, revulsion. Will that difference in terms lead to a defeat of cartel enforcement? It will surely help.


This is the closing of a recent post I did for the Fraser Institute in Canada. The post is titled "Supply Management or Cartel Enforcement?"


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CATEGORIES: Competition , Regulation




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