Expansion on a point per Illustration

“Regulation is a number of things: It is a tax. It compels firms to cash in capital to comply. It cripples the capacity of entrepreneurs to run firms to markets.” From, the item below “ Central Planning : Soviet Style GozPlan Telephone Set – string attached to tin can“.

A case illustration. I refer, again, to the case of a light processing firm. To recapitulate, it is the firm which washes and packages into cellophane bags salads for sale in supermarket chains. It is in N.S.W.

Each year the firm has to expend $500,000 on meeting alone O.H.&S. complaince renewal, without which the goon squad of the N.S.W. govt. will shut it down. The $500,000 per annum expenditure on compliance renewal does not, of course, per product unit cost of applying OH&S in actual production.

For the firm to increase scale, in order to increase volume of output, the firm would by force of Govt. diktat in O.H. & S., have to incur higher annual renewal costs and then higher production costs. This would entail the firm would shift from profitable to loss making.

The upshot is, the owners, while they would like to increase scale, they won’t increase capital. Another upshot is, as the owners declared increasing capital, would increase the number of full time employees required. Needless to say, those potential jobs won’t be opened.

 Further, there are no economic profits to induce scaling up. No free enterprise can extort or force consumers to pay higher prices. Next, the frim cannot reduce prices further to increase demand because of the imposed cost burdens, of which O. H. and S. is but one.

The case, because of its simplicity, makes plain the point, regulation constricts production, it sacks capital, it cripples markets, it ensures shortages. It cripples the capacity of entrepenuers to work capital, and to accumulate capital. Indeed, as this case makes plain, it pays entrpeneurs  halt expansion up to a level internal for that firm which would see the burden of regulation compounded for that firm.

Peter Costello, and fellow KKR Puppet Master to Michael Kroger, believes ‘regualtion’ is the Rule of Law. Not it is not, it is the rule of dictators and their goon squads. regulation serves nothing at all but the desire of politicians and bureaucrats to enslave many to the yoke of National socialist tyranny, or, in realty, to themselves the real beneficiaries of ‘regulation’. Regulation serves neither firms, investors, employees, consumers. Adds not one jot to successful production. To the contrary, it imposes losses on those victims of venal, craven, power hungry, empire building socialist spivs called politicians and bureaucrats. That is all. 

Regulation wreaks economic carnage, and it is a lever for the overthrow of the Rule of Common Law in favour of the rule of thugs.

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