Friday, March 18, 2005
On this day:

More Protection for "Big Shrimp"

Proposed federal rules that would cap the number of shrimping vessels in the Gulf of Mexico are anti-competitive and will inevitably result in higher prices for consumers. A few points from this Mobile Register article today:

In May, the federal government is expected to pass new rules that would cap the number of shrimping boats in the Gulf, potentially closing off future generations from their family tradition. The measure pits fishermen who still have boats against those who've lost them, believers in the free market against the zealots of "stability" and sometimes father against son...

Several options will be considered by the quasi-governmental Gulf of Mexico Fishery Management Council at its May meeting in Biloxi, including one that would limit the fleet to the 2,700 or so boats that were registered in December 2003.

Another would extend that deadline to May 2, 2005, potentially opening the fishery to hundreds more vessels. The cap would last 10 years.

The backers of the proposed regulation argue that closing off the fishery will allow those in the industry to catch more shrimp and make a profit, as well as insulate the industry from cycles of booms and busts. No one is claiming that shrimp are over-fished...

Critics of the measure say it's a sign that one more American industry is running scared from global competition, speeding away from capitalist uncertainty and toward the security of socialist-style controls...

"Businesses always want to insulate themselves from booms and busts. It's just a way of saying they want to insulate themselves from competition, so they can make more money," said James Gattuso, an economist with the conservative think tank The Heritage Foundation. "The problem is, when you limit competition, you cut out the innovation that's needed to make an industry competitive, especially in a global market."...

Perhaps a larger economic question raised by the proposed boat cap is that of equal opportunity, an issue that especially concerns hundreds of Vietnamese-American shrimpers who lost their boats to finance companies and banks when the market hit bucket bottom in recent years.

This comes in addition to the tariffs on foreign shrimp that were recently approved by the Department of Commerce. As the Cato Institute's Radley Balko wrote in response to that decision:

The shrimping industry is a great example of how the fight for free trade isn't about protecting big business at all. Rather, it's about protecting free markets, promoting commerce and generating prosperity. It's about consumers having access to the best goods at the best prices, and employees and employers finding one another where they may - and doing both without deference to or interference from artificial borders, protective special interests or messy, overarching governing bodies.

Erecting new barriers to market entry is even worse than imposing tariffs, in my opinion, because it is aimed solely at keeping new domestic competitors from entering the market. What if the federal government put caps on the number of farmers...or gas stations...or bookstores? I'm sure a lot of the big players in those lines of work would like that plenty - but that doesn't change the fact that it would be bad economic policy.

This kind of government nonsense has no place in a free marketplace, and the supposedly free-trade-friendly Bush administration should put an end to it.