Thursday, May 31, 2007

A Fistful of Laws

The UK will be instituting a series of new laws bent on cracking down on "cowboy traders." From the best I can tell, a cowboy trader is someone who engages in "unfair" trading practices, ranging from "bogus closing down sales" to what Americans would call con-artists (those folks that promise you one thing but deliver another).

Like all developed economies, the UK has laws against fraud. But these laws aren't really about fraud. They are about people who's job other people don't like. Granted some of it seems reasonable (refusing to leave a customer's home when asked to do so; making persistent and unwanted telephone calls) but really those can be addressed under existing laws (trespassing and harassment).

But others are perfectly absurd. The UK wants to stop people from selling the elderly burglar alarms. Forget how to enforce the law, why is it bad if some of someone buys something that mitigates a well justified fear?

The law against faux closing sale ads is an interesting one as well. Technically, when a firm says it's shutting down but doesn't, that's fraud. But who cares? The only reason companies say they are going out of business is to signal that these prices are particularly low. Why does it matter if they actually go out of business? While we could imagine some people feeling cheated (though I have no idea why; it is not as if the company is asking for more money), this is hardly worthy justification to bother policing.

Con-artists are bad--I'll give you that. But thse anti-cowboy trader laws are more about kicking up a lot of dust than helping real folks.

2 comments:

Jason said...

It's your blog, and you don't *have* to provide economic analysis if you don't want to. But I find this recent spate of "they just don't like X" faux-explanations for political action to be really unsatisfying. You provide no support for this explanation, no quotes, no data. It's pure assertion.

Perhaps you will be teaching your intro students that Wal-Mart "just doesn't like" high prices?

David said...

Then I will be more clear: one source of law comes about from satisifying an outspoken desire to certain elements of society that some people tend not to like. It does not have to be the case that such jobs (in this case) are immoral: they only need to sound as such. It sounds bad to have "bogus" closing sales or to engage in "preying" on elderly people. The bits I quoted and the link I provided sound just like one would expect given such preferences. Granted, some supporters are merely ignorant. But some just don't like X.