by Mario Loyola
Texas Public Policy Foundation
April 28, 2014
State law is full of government-sponsored cartels of every size and description, from occupational licensing to agricultural marketing boards. Those cartels all create staggering economic losses for society, and virtually all of them should be considered violations of the public trust. Justifications of public health and safety are usually just a smokescreen to obscure forced transfers of economic wealth from the public to special interests. The government-sponsored cartelization of the American economy over the past century has been a major driver of the expansion of federal power. States that created cartels for their politically powerful special interests became uncompetitive. The uncompetitive states soon formed coalitions in Congress to seek federal protection. Thus did the states freely give away the powers reserved to them by the 10th Amendment. Both legislators and the public need to understand the economic consequences of government-sponsored cartels and their corrosive effect on constitutional democracy.



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