Business Lies

Business lies are usually lies for the sake of profit. Sometimes, however, politicians, governments and consumers help maintain such a lie. Here is an example of that.

The lie is that business owners don't want regulation, but we need them to be regulated. Both parts of this belief are a lie.

The truth is that business owners almost always want more regulation, not less. They will fight regulations that harm them, but push for those that harm their competitors. Of course they want the regulations that help them.

A good example is the regulations involving licensing. You might think that businesses would fight these, and the public wants them. In most cases this just isn't true. In reality, when an industry develops to a certain point, existing businesses quietly call for licensing. Why? To try to exclude competition or make it harder for them to compete - to increase profits.

Of course, politicians get votes for picking up the cause, claiming that licensing is for the public good. Bureaucrats get power from the equation. But is this process for the public good? Are we really in such terrible danger if we get a haircut from someone without a license?

What Businesses Really Want

A friend with a carpet cleaning business was complaining one day about the "cutthroats" who clean too cheap. Without the expensive training and equipment my friend has, they can charge less. His solution to this problem of free competition? "Regulate carpet cleaning and license carpet cleaners." This would force the cheap guys to upgrade equipment and training, which was "better for the consumer," he claimed.

The "cutthroats" would have to quit the business, or spend the money to comply with the new regulations. Of course, this means they would have to charge more, and so the bigger players could compete more easily. This is the real point of such regulation.

I used one of these cheap cleaners years ago. He probably didn't clean my carpet as well as the more expensive companies, but it was good enough for me, and half the price. I have more income now, so I might choose a better cleaner, but I like having the choice. Never mind what the consumer wants, though: if they ever regulate the carpet cleaning industry it will be in the name of the consumer, and the cleaners will be the ones pushing for the regulations.

"Public good," is a nifty concept lawmakers use to hide the fact that they are creating regulations for the benefit of specific businesses, industries and groups that lobby them. Politicians get money and votes from this, businesses get profits, bureaucrats get power, but what does the public get? Simple solutions to imagined problems.

With enough money, you can already buy what you want, right? To have a higher quality bicycle, bed or house just requires that you pay for it. The rich don't need regulations to force all businesses to comply with certain standards. They can pay for what they want.

What if you don't have much money? Then such regulations take away your cheaper options, making life more difficult (I just wouldn't have had my carpet cleaned). These kinds of regulations primarily benefit businesses, politicians, and bureaucrats.

Of course some consumers get pleasure from the idea of "punishing" businesses owners with regulations. But for the rest of us, it just means fewer, more expensive options. What kind of reality-denying thought process leads to an expectation of higher quality or safety without higher cost?

Consumers, then, are hurt most by this lie that business owners don't want regulation, but we need them. Still, they rarely understand what is happening. It reminds me of something that Warren Buffet said: "If after twenty minutes at the poker table you can't tell who the patsy is, it's you."

Read the truth about 98 more lies in the e-book "99Lies," part of the "You Aren't Supposed To Know" package at: http://www.TheSecretInformationSite.com/99lies.html

99 Lies | Business Lies