Mises Daily Articles
It cannot even be said that the State has ever shown any disposition to suppress crime, but only to safeguard its own monopoly of crime. ~ Albert Jay Nock
Last October, James Turner rented a car from Acme Rent-a-Car in New Haven, Connecticut. Acme installs a global positioning system (GPS) in its cars so it can find stolen cars and charge customers who drive dangerously. When a customer drives faster than the posted speed limit, that information is sent to Acme.
Turner signed a contract that has the following language in bold type at the top: "Vehicles driven in excess of posted speed limit will be charged a $150 fee per occurrence. All our vehicles are GPS equipped."
The contract also says that the driver will not be charged unless the satellite catches him speeding more than two minutes at a time. Turner allegedly drove faster than 77 mph three times, so Acme charged him $150 for each incident. Turner then filed a lawsuit against Acme.
A couple of weeks ago, the Connecticut Department of Consumer Protection filed an administrative complaint against Acme in which it charged the company with violating state law when it fined its customers who exceeded the posted speed limit. The department's commissioner said, "There is no legal ability for them to charge a penalty when there has been no damage." Read that quote again. Is it just me, or does that reek of hypocrisy? And not just as it applies to speeding, but for all victimless crimes.
The department requested that Acme sign a cease-and-desist order banning it from charging customers for speeding and providing restitution to the twenty-six customers who have been charged. The company refused, so a hearing will be held in August.
Rental-car companies should be allowed to charge their customers for speeding or anything else as long as the charges are specified in the rental contract. Rental-car companies pay many thousands of dollars for each car and should be allowed to take measures to protect their investment. Also, being able to charge for speeding helps compensate a company for renting its cars to higher-risk drivers, who otherwise might not be able to rent a car.
(One time I came home from Germany on leave and couldn't rent a car because I was under 24 years of age. This despite the fact that the Army was about to entrust me with the command of a howitzer platoon. Perhaps I could have rented a car if rental car companies could have charged me for speeding.)
If charges are unreasonable, the company will develop a bad reputation, lose customers, and go out of business. If you don't want to rent a car from a company that charges for speeding, you don't have to. Although the state Department of Consumer Protection got involved in this case, the state could give a rat's ear about consumers, whom it burdens with crushing taxes and regulation. The state probably went after Acme because a private company was threatening its monopoly on laws and law enforcement.
The state should be happy that another entity is helping it enforce its laws, and is doing so for free. Instead, it says that entity is breaking the law by helping it enforce the law! The state saw a free-market legal system (where laws are determined by consumers and insurance companies instead of by voters and politicians) beginning to sprout and decided to "protect the consumer" by stamping out its competition.
The state likes the system just the way it is, with speed limits that are far too low and lax enforcement. That way, any time it needs a little revenue, it can have the police enforce speed limits for a day. This system is unjust because virtually everyone drives faster than the speed limit, but only a tiny fraction receive a ticket for doing so. Every time I pass a car that has been pulled over by the police, I think, "There but for the grace of God go I."
The system is really no different from highway robbery. Sometimes half a dozen or more police cars will be lined up on the side of the road ready to pull over drivers who are speeding. The sight of that much police power concentrated in one location for the sole purpose of harassing and fining peaceful people makes me wonder if I'm living in an authoritarian state. The police are supposed to "protect and serve," but about the only time I ever see a policeman is when he's looking at me from behind a radar gun. Every time that happens, I don't feel very protected.
It would be much more civilized if my insurance company and I could agree in advance what an acceptable speed limit would be. Some insurance companies might offer lower premiums in return for its customers accepting lower speed limits, while drivers who wanted to drive faster would probably have to pay higher premiums to do so without penalty.
Perhaps insurance companies would monitor traffic conditions and weather in different areas and beam the current speed limit for that stretch of road to their customers' cars. A free market is so creative that I can't predict what systems would emerge, but they would almost certainly be better than the current system, one based on monopoly and coercion.