It seems to me that few people dare entertain the thought that government is inherently bad, that it’s bad even when it’s honest and well-intentioned. That was pretty much what the founders of this republic thought but the idea is almost lost. Even when ordinary people think of bad, oppressive government, they usually have the distant federal government in mind. But it’s too far, precisely, too large, it has too many tentacles. Perhaps it’s easier to understand the moral issue if you consider something smaller and closer. The city of Santa Cruz in California (population about 50,000) just gave us a clear example of well-intentioned government action with predictably bad consequences. It’s small and it’s innocent. Repeat: innocent.

The city council just decreed that there could be only two medicinal marijuana shops in the city. Two consequences.

1 The council has created by decision a quasi-monopoly. Absent such restrictions, there might have been one hundred pot shops at first. After a short time, the number would have dwindled to a small number, possibly only two. But the winners would have been those offering the best combination of price and quality. The latter, understood widely to include possibly diversity of products and quality of service, an essential ingredient in serving presumably sick buyers.

Instead, we are going to end up with the first two applicants. That’s if the decision-making process is honest. Those two may be the worst possible or they may just be mediocre. The city’s decision is another factor, a small factor to be sure, of local high cost of living and a low level of satisfaction. Multiply this decision by 10 million and you have the Soviet Union’s economy. (Reminder: The Soviet Union did not just deny freedom, it denied a decent standard of living and the dignity that comes with not having to scramble for oranges.) Continue reading →