WEBVTT NOTE 32. Should There Be Shop-Closing Laws? 1 00:00:00.000 --> 00:00:02.920 Should there be shop-closing laws? 2 00:00:02.920 --> 00:00:06.680 A really cool thing is happening in Germany. 3 00:00:06.680 --> 00:00:13.920 After decades of strict laws regulating when stores can open and close, Leutenschlussgesetze, 4 00:00:13.920 --> 00:00:17.480 the laws are progressively liberalizing. 5 00:00:17.480 --> 00:00:21.680 Since 2006, the decision has been left to the individual states. 6 00:00:21.680 --> 00:00:26.240 Whereas commercial establishments once could not open their doors before 6 a.m. or keep 7 00:00:26.240 --> 00:00:51.240 In the United States, we have no national history of such laws, apart from restrictions on Sunday shopping, which are left to the states and counties, and even with the so-called blue laws, the general trend has been toward liberalization. 8 00:00:51.240 --> 00:00:57.620 The subject intrigues me because it is like so many other subjects that touch on the very 9 00:00:57.620 --> 00:01:01.560 viability of liberty itself. 10 00:01:01.560 --> 00:01:07.220 If you were to think this issue through using what F. A. Hayek calls a constructivist mindset, 11 00:01:07.220 --> 00:01:10.900 the presumption that society is a giant Lego model with pieces that must be assembled and 12 00:01:10.900 --> 00:01:16.220 disassembled at will, it is not difficult to dream up many seemingly reasonable arguments 13 00:01:16.220 --> 00:01:20.520 for why a commercial society must have such laws. 14 00:01:20.520 --> 00:01:26.180 Do we really want to leave such things to the anarchy of the market? 15 00:01:26.180 --> 00:01:33.240 So let's just pretend to be statist constructivists for a moment and see how this works. 16 00:01:33.240 --> 00:01:38.460 A civilized home business will stand no chance against a heavily capitalized corporation 17 00:01:38.460 --> 00:01:43.680 that can more easily absorb the high costs of early openings and late closings. 18 00:01:43.680 --> 00:01:48.120 There are electrical bills to pay and labor costs involved that a small business, which 19 00:01:48.120 --> 00:01:53.520 which might have better products and services, will not be able to afford. 20 00:01:53.520 --> 00:01:57.660 So what is the undercapitalized company going to do? 21 00:01:57.660 --> 00:02:02.800 It will have to choose between adopting the hypercapitalistic focus of its competitors 22 00:02:02.800 --> 00:02:05.320 or closing its doors. 23 00:02:05.320 --> 00:02:09.320 In a footrace, all competitors have the same starting line. 24 00:02:09.320 --> 00:02:13.080 One would never permit one runner to start at a different place from the others. 25 00:02:13.080 --> 00:02:16.720 Why should we permit this in enterprise? 26 00:02:16.720 --> 00:02:21.000 is fine, but the rules have to be the same for everyone. 27 00:02:21.000 --> 00:02:26.100 And think of the workers, they have families, they need downtime, they need a breather to 28 00:02:26.100 --> 00:02:30.700 have dinner with others, read books and cultivate a civilized lifestyle. 29 00:02:30.700 --> 00:02:35.600 No one should be forced to choose between working ridiculously early or late and having 30 00:02:35.600 --> 00:02:37.080 no job. 31 00:02:37.080 --> 00:02:41.240 And yet, this will surely be the result if we just let any business open or close whenever 32 00:02:41.240 --> 00:02:43.580 it wants to. 33 00:02:43.580 --> 00:02:49.260 As for the consumers, surely people can figure out a way to get their shopping done between 34 00:02:49.260 --> 00:02:56.780 6 a.m. and 10 p.m. That leaves a solid 8 hours for sleep, which everyone needs. 35 00:02:56.780 --> 00:03:00.540 If we let people shop at any hour, consumers will naturally choose times when the streets 36 00:03:00.540 --> 00:03:04.400 aren't crowded and the store lines are shorter, which means that businesses will have to stay 37 00:03:04.400 --> 00:03:10.780 open ridiculously long, even 24 hours a day. But with mandatory limits on commercial hours, 38 00:03:10.780 --> 00:03:14.380 Scientists will figure out that they need to get real lives and stop commercialising 39 00:03:14.380 --> 00:03:16.580 the whole of them. 40 00:03:16.580 --> 00:03:18.540 And think about this. 41 00:03:18.540 --> 00:03:22.340 What kind of society do we want to be? 42 00:03:22.340 --> 00:03:26.980 Do we want the entire nation engulfed in the buying and selling of things, or do we believe 43 00:03:26.980 --> 00:03:31.140 that there are other human values that must be part of the balance? 44 00:03:31.140 --> 00:03:35.200 If we permit the anarchy of the market to rule, we make profit and loss the measure 45 00:03:35.200 --> 00:03:38.020 of all human success and failure. 46 00:03:38.020 --> 00:03:46.780 Okay, now that I've made what seems to me to be an impenetrable case for sharp closing 47 00:03:46.780 --> 00:03:52.260 laws, consider that we do not have these laws in the United States, for the most part. 48 00:03:52.260 --> 00:04:00.220 And somehow, against all seeming rationality, the system works, as we all well know. 49 00:04:00.220 --> 00:04:04.540 Chick Phil-A voluntarily closes on Sunday, and McDonald's does not. 50 00:04:04.540 --> 00:04:08.040 Now, they both make a profit. 51 00:04:08.040 --> 00:04:10.840 Many stores stay open 24 hours, and the workers love it. 52 00:04:10.840 --> 00:04:13.760 They have more options to adjust their working hours. 53 00:04:13.760 --> 00:04:16.680 This is good for employment. 54 00:04:16.680 --> 00:04:19.740 Consumers may or may not take advantage of longer hours. 55 00:04:19.740 --> 00:04:24.000 In fact, it is the consumers that dictate whether it is in the interest of the store to stay 56 00:04:24.000 --> 00:04:26.380 open after hours. 57 00:04:26.380 --> 00:04:29.800 Stores may try it and find it pointlessly unprofitable and stop. 58 00:04:29.800 --> 00:04:35.080 For some reason, I don't understand, most barbershops in the South close on Wednesdays. 59 00:04:35.080 --> 00:04:36.840 Such is their right, it works for them. 60 00:04:36.840 --> 00:04:40.520 When it stops working, they will change. 61 00:04:40.520 --> 00:04:41.520 Or it could go the other way. 62 00:04:41.520 --> 00:04:47.560 In my own town, a pharmacy long had short hours, 8 a.m. to 5 p.m., until a big chain 63 00:04:47.560 --> 00:04:52.000 store came in across the street with the 24-7 policy. 64 00:04:52.000 --> 00:04:55.960 Faced with declining profits, the old store adopted the same hours. 65 00:04:55.960 --> 00:05:00.840 Now there are two pharmacies facing each other, each of which is open at all times. 66 00:05:00.840 --> 00:05:02.320 Who wins? 67 00:05:02.320 --> 00:05:08.000 Both seem profitable, but the real winner here is the consumer. 68 00:05:08.000 --> 00:05:12.000 My point is that this is a case where the idea of freedom would seem not to work, from 69 00:05:12.000 --> 00:05:17.080 a constructivist point of view, and where a plan seems needed. 70 00:05:17.080 --> 00:05:21.240 This is true in a host of areas, the freedom to live where you want, work where you want, 71 00:05:21.240 --> 00:05:25.420 invest in what you want, drink or smoke what you want, freely trade with anyone from any 72 00:05:25.420 --> 00:05:27.860 and Money Nation, etc. 73 00:05:27.860 --> 00:05:32.140 You hear these kinds of objections when you propose that any law be repealed. 74 00:05:32.140 --> 00:05:35.420 Why, there will be chaos! 75 00:05:35.420 --> 00:05:41.100 It turns out that the real chaos comes when the state attempts to allocate scarce resources 76 00:05:41.100 --> 00:05:45.540 rather than leaving it to the price system and its talent for revealing what is economically 77 00:05:45.540 --> 00:05:49.020 rational or irrational. 78 00:05:49.020 --> 00:05:53.100 Sharp-closing laws presume to tell people how they should use their time. 79 00:05:53.100 --> 00:05:57.480 But time, writes Mises, is a scarce resource. 80 00:05:57.480 --> 00:06:03.220 Man must economize it as he economizes other scarce factors. 81 00:06:03.220 --> 00:06:10.040 Only private actors, not politicians and bureaucrats, are in a position to make decisions concerning 82 00:06:10.040 --> 00:06:13.220 how it is used. 83 00:06:13.220 --> 00:06:20.680 Their choices can be accessed based on a business model, rather than arbitrary political wrangling. 84 00:06:20.680 --> 00:06:25.340 This is why liberty works and the state fails so miserably, and why the best laid plans 85 00:06:25.340 --> 00:06:29.960 in politics never work out as expected. 86 00:06:29.960 --> 00:06:33.360 Consider the case of patents. 87 00:06:33.360 --> 00:06:36.900 People say that if we get rid of patents, no one will invent anything anymore, and those 88 00:06:36.900 --> 00:06:42.080 who do will have their ideas and just profits stolen. 89 00:06:42.080 --> 00:06:47.020 And yet, for most of human history, patents have not existed, and patents have not been 90 00:06:47.020 --> 00:06:49.840 part of the biggest technological explosions in our history. 91 00:06:49.840 --> 00:06:52.880 In fact, the opposite is true. 92 00:06:52.880 --> 00:06:58.440 Patents slow down the pace of development by granting monopolies to favored producers. 93 00:06:58.440 --> 00:07:03.720 They thereby discourage innovation in the name of encouraging it. 94 00:07:03.720 --> 00:07:08.520 This is why I found Ron Paul's answer on the drug question at an early Republican debate 95 00:07:08.520 --> 00:07:12.760 to be so incredibly brilliant. 96 00:07:12.760 --> 00:07:17.360 The questioner asked him if he would favor legalized heroin. 97 00:07:17.360 --> 00:07:21.800 The viewers are supposed to be horrified and surely many were. 98 00:07:21.800 --> 00:07:26.200 He said the real issue is liberty. 99 00:07:26.200 --> 00:07:32.960 And then he asked the question, how many people here in this room would start using heroin 100 00:07:32.960 --> 00:07:35.000 if it were legal? 101 00:07:35.000 --> 00:07:41.420 How many people would say, oh, we have to have these laws to keep me from being an addict? 102 00:07:41.420 --> 00:07:45.800 Everyone cheered because we knew the answer. 103 00:07:45.800 --> 00:07:49.220 There is a remarkable rationale behind what he said. 104 00:07:49.220 --> 00:07:55.520 He pointed out the simple truth, that we are all what we make of ourselves, and the state 105 00:07:55.520 --> 00:07:58.980 isn't really making us better people. 106 00:07:58.980 --> 00:08:05.120 To be a good or bad person is a choice, and the state's laws don't really possess the 107 00:08:05.120 --> 00:08:09.360 magical power to influence that decision. 108 00:08:09.360 --> 00:08:17.860 This was an extremely rare moment in human history when good sense actually emerged from 109 00:08:17.860 --> 00:08:20.740 a political debate. 110 00:08:20.740 --> 00:08:26.240 It often happens that when societies adopt some constructivist rule, the inner contradictions 111 00:08:26.240 --> 00:08:30.020 eventually end up leading to its repeal. 112 00:08:30.020 --> 00:08:32.100 This is what happened in Germany. 113 00:08:32.100 --> 00:08:36.520 The closing laws couldn't really apply to gasoline, for example. 114 00:08:36.520 --> 00:08:39.960 After all, we can't have people pulling over on the autobahn and sleeping while they wait 115 00:08:39.960 --> 00:08:42.760 for the gas stations to open. 116 00:08:42.760 --> 00:08:46.600 Then the bakers too pointed out that they have to be open earlier. 117 00:08:46.600 --> 00:08:50.680 Then there are shops for tourists who don't have all the time in the world, so special 118 00:08:50.680 --> 00:08:55.040 Zones of Freedom were created for them. 119 00:08:55.040 --> 00:09:01.280 Gradually the laws were eroded, to the point where human choice was permitted to prevail. 120 00:09:01.280 --> 00:09:03.480 Does this cause a race to the bottom? 121 00:09:03.480 --> 00:09:04.480 No. 122 00:09:04.480 --> 00:09:12.200 In other words, it makes everyone happier than they would otherwise be. 123 00:09:12.200 --> 00:09:16.320 It makes for a better society. 124 00:09:16.320 --> 00:09:20.400 Liberty works because it permits people to work out their problems through exchange and 125 00:09:20.400 --> 00:09:22.200 cooperation. 126 00:09:22.200 --> 00:09:26.120 No one is coercing anyone to do anything. 127 00:09:26.120 --> 00:09:28.360 Everything happens through consent. 128 00:09:28.360 --> 00:09:32.000 Nothing happens through force. 129 00:09:32.000 --> 00:09:41.060 In some ways, liberty is the craziest and most implausible idea anyone ever dreamed up. 130 00:09:41.060 --> 00:09:48.500 And yet, only liberty really accomplishes that seemingly elusive dream of a prosperous, orderly 131 00:09:48.500 --> 00:09:54.300 and peaceful society, in which every member is permitted to have a role in its development. 132 00:09:54.300 --> 00:09:59.340 It takes some imagination to understand how. 133 00:09:59.340 --> 00:10:04.340 We are fortunate to be living in times when the digital world of relative freedom is providing 134 00:10:04.340 --> 00:10:07.580 us a model of the ideal. 135 00:10:07.580 --> 00:10:10.660 Every day there is improvement. 136 00:10:10.660 --> 00:10:15.300 Every day we are served up better and better ways of doing things. 137 00:10:15.300 --> 00:10:19.580 Imagine if the physical world were just as free as the digital one, drawing on the creative 138 00:10:19.580 --> 00:10:23.980 powers of everyone in the world and the service of the common goal of finding ever better 139 00:10:23.980 --> 00:10:26.660 ways to do things. 140 00:10:26.660 --> 00:10:29.580 What would life be like? 141 00:10:29.580 --> 00:10:35.140 How much are we being held back by the seemingly necessary laws that actually make us all poorer 142 00:10:35.140 --> 00:10:38.660 and less civilized than we would otherwise be? 143 00:10:38.660 --> 00:10:43.780 It takes a certain kind of brilliance to imagine such counterfactuals. 144 00:10:43.780 --> 00:10:49.180 This is why we owe a particular debt of gratitude to the liberal tradition of thought for helping 145 00:10:49.180 --> 00:10:56.540 Letting us make sense of how the truly implausible can become the only truly workable ideal.