Consumer Protection

I wish I’d written this! From what I can tell, much of our “consumer protection” system merely adds cost and complexity to what we buy, frustrates consumers, and protects no one. And it’s getting worse. Some governmental units want restaurants to add calorie information to menus. Gosh, the “potatoes in cream sauce” side dish is fattening – I’m glad the government warned me!

The real protection for consumers comes from producers who want to maintain their reputations and profits. When there are strict government regulations, producers can say they complied with all the standards. Had there been no regulations, producers would have done more since they had no government blessing to hide behind. So producers often like regulations: it gives them a “safe harbor”, makes it costly for new competitors to emerge, and discourages innovative new approaches. The only losers in a regulated consumer protection scheme are consumers and taxpayers.

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