Last week I sat through the billion dollar blockbuster hit, Jurassic World. While not a complete waste of my time (“he’s just being over-dramatic!”), the film had all the annoying attributes found in a big budget Hollywood movie. Most irritating was the not so subtle message that corporate profits were the root of evil. Watching a film that demonizes profits, despite being specifically produced with the goal of seeking record high box-office profits, requires an especially strong tolerance for hypocrisy.
Liberals have done a masterful job of vilifying the word “profits”. Politicians and aspiring politicians love to use the word “profits” to condemn diabolic corporations that gauge the public mercilessly. Yet the ironic reality is that if liberals are truly committed to eradicating high profits, they are approaching the problem from the absolute wrong direction. All regulations, restrictions, and barriers to enter markets only increase profitability for those that are able to clear such hurdles. This can be seen in a variety of scenarios.
A highly aggressive example is the narcotics market. Government sends agents armed with machine guns to unlucky vendors which predictably escalates the profitability for those able to avoid such entanglements. In less obvious examples, heavy regulatory labor requirements benefits large corporations like Walmart as it prevents smaller competitors from entering the market.
When useless government barriers are removed from markets, vendors must outperform their competitors by offering cheaper and improved services. Ultimately only the vendors offering quality services at the slimmest of profit margins are able to remain in business.
Examples of true free markets with minimal regulation are hard to find. Government interference exists in countless forms such as declaring what wages must be paid, to mandating senseless permits be acquired. Yet there is an interesting example of a completely unregulated market compared to a highly regulated market that provides insight that liberals should take note of.
Given the cavalier thrill-seeking nature of most Rostra readers, I’m going to assume most have at least heard of the Powerball lotto and the record breaking excitement that now surrounds it. It is one of the few lotteries operating legally across most state lines. Entry in this market is strictly regulated. Any brave business that attempted to compete with Powerball would likely have its executives jailed and most of their assets seized.
Such lack of competition has led to a massive contribution margin for Powerball. The current player return can be estimated at around 60%. From a gambling perspective, this is a margin beyond the wildest dreams of any casino. By comparison, a mindless roulette wager on “Red” yields a 95% return, a pass line bet in craps returns 98.6%, and sensible blackjack usually is around 99.0%.
What many of even the most renegade outlaw readers of Rostra may not know is that there are unregulated lotteries easily accessible via the internet. Bitcoin has facilitated this and thus it is quite easy to enter into the market of offering an online lottery. One of the more prominent ones is “Yet another bit coin lottery”. The lottery operates on a transparent platform where all payments and random numbers generated can be publicly verified. However YABTCL returns between 99.7% to 99.9% of gaming action. Stated differently, highly regulated Powerball profit margins are about 200 times higher than that of the free market lottery.
So all you liberals who hate evil profits – are you ready to join the free market revolution and start getting serious about stomping out profits? Almost every industry from global transportation to hair styling is riddled with unnecessary government land mines constricting businesses from competing. Let’s drop the hammer on these greedy profiteers starting with disbanding the California Film Commission so that Jurassic Park 6 gets a taste of its own medicine.
Steve Rider is one of the founders of Republican Liberty Caucus of San Diego, and a board member of non-profit (because he seriously hates profits!)