They Were for Cartels before They Were against Them

by on November 30, 2006

Joe at Techdirt makes an excellent point about government and monopolies:

Here’s a story that hits on some of today’s themes of monopolistic behavior and keeping stuff off the internet. The Department of Justice has been given the go ahead to proceed with a lawsuit against the National Association of Realtors, alleging that the group colluded to prevent listings from appearing online, in a bid to give established brokers an advantage. Now, we’d be tempted to say that however backwards the organization’s thinking is, they have the right to distribute their data to whomever they want. But we should take a step back and ask why the NAR is in the position to monopolize this information in the first place. That fault rests with the government, which has put the NAR in charge of regulating its industry, and deciding who can and can’t be a broker. In other words, its monopoly has official legal blessing. Without this, anyone could go out and get listings, and abide by whatever rules they wanted to, offerings to broker home sales as efficiently as possible. So instead of suing the NAR, for doing what it’s intended to do (maximize profits for its members) why not get at the root of the problem and take away its monopoly status?

Quite so. We just published an article by my colleague Sarah Brodsky describing how the realtors’ lobby recently got a euphemistically named “Homeowners’ Bill of Rights” passed in Missouri that limits competition by outlawing discount real estate brokers. If you want to pay someone to list your house but do the rest of the legwork of selling the house yourself, that’s too bad. You have to go with a full-service real estate agent.

The state has a split personality when it comes to monopolies and cartels. Most of the time, our elected officials vigorously denounce them and take action to (supposedly) increase competition. However, if they’re created by the government, that’s a whole other ball game. In that case, only crazy right-wingers would suggest that more competition would be beneficial. And sometimes, the state does both at the same time: creating a cartel with its right hand, while its left hand simultaneously investigates the cartel for being anti-competitive. It’s very strange.

Comments on this entry are closed.

Previous post:

Next post: