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Labor and Energy Regulations Take Us To the Cleaners

Tags Free MarketsInterventionism

02/07/2014Christopher Westley

My clothes dryer went bust the day after Christmas, leading to one of the more common frustrations we face in the modern nation-state.

You see, there was a time when one’s dryer broke, the owner faced two options: have it repaired or buy a new one. The owner would weigh the costs and benefits of each, make a decision, and then move on to other things. But those days are gone. Now when an appliance goes on the fritz, a dreaded third option is increasingly being foisted upon us: that of fixing it yourself.

Now, self-repair was probably a more common choice back during my grandfather’s generation. But as the economy expanded and per capita incomes grew, the time spent repairing one’s own appliances meant less time working in the market. Toward the end of his career, my grandfather — the owner of a sheet metal business in Waukesha, Wisconsin — probably paid others to repair his appliances so he could better focus on serving his own customers.

This is one example of how the expansion of wealth made possible under capitalism leads to the creation of new jobs that did not exist previously. We don’t know what alternatives to appliance repair these repairmen would have chosen as careers had the repair market for labor not opened up — and even this development would never have occurred without entrepreneurs from previous generations introducing appliances to the home in the first place — but we can be sure it would have brought them less benefit. If this were not (apodictically) true, they would have chosen those alternatives instead of their actual careers in appliance repair.

With my own broken dryer, I could have dipped into savings and bought a new low-end model for about half a grand, but this was an option I wanted to avoid. I could have contacted a repair service, but the cost could have easily reached the price of a new machine.

Both outcomes result from restrictions on market forces that hinder both the supply of dryers and availability of repair. “Energy Star” compliance standards on appliances have increased production costs so as to cartelize this industry while providing only negligible benefits in terms of power efficiency. Meanwhile, labor market interventions, especially on the entry-level side of the market, have reduced the supply of repairmen, thus allowing existing repairmen the ability to claim higher wages than they would otherwise. For people (like myself) who do not live in a big city, even finding a repairman can be difficult.

The end result: The effects of government failure were reaching into my home and savings. Worse, they were forcing me to embrace the dreaded third option.

I chose to fix my dryer myself.

This decision was not made gleefully. I am not a tool guy. My comparative advantages tend not to include ratchet sets and elbow grease. What’s more, I resented being forced to teach myself skills my grandfather and his generation gladly gave up when market forces developed to a point at which they could. My situation smacked of societal devolution poking its cloven hoof into my laundry room.

But I plowed ahead and soon learned I was far from being alone in my predicament and that, in fact, huge masses of individuals across the country are being forced by similar artificial circumstances to take on last-minute appliance repair training against their will.

In response, the Internet is today chocked full of repair manuals that can be accessed after a few clicks into a search engine, while there are thousands of repair-oriented YouTubes uploaded by heroic experts explaining how to diagnose and then repair seemingly any appliance problem.

Tasks such as replacing a dryer motor or belt become much less daunting when you can watch someone else do it, step-by-step, in a video that’s posted by a professional and played by a novice — all for a zero price. While I watched several such videos, it occurred to me that they were part of a vast, spontaneous, decentralized, and unregulated training system that has emerged to counter the adverse effects of government intervention. Which lead me to ponder (as I unplugged my dryer and pulled it away from the wall): What similar market innovations developed in the former Soviet Union that made life somewhat bearable there? As the size and scope of government in the United States grows, what further workarounds will people be forced to instigate to make life bearable here? Will subversive videos explaining do-it-yourself surgery pop up once prices in health care are completely abolished?

These spontaneous training systems are far from perfect. They are clearly second-best, with first-best being those market options made unseen and unattainable due to violent interventions in market forces. But they are more than good enough. I’m proof of it. If an economist like me who was heretofore unaware that ratchets were measured in both inches and centimeters can replace a dryer belt and motor with the help of a few hastily found YouTube friends, then they serve much more than the social good.

They also serve the poor, especially, who suffer the most when government restricts market choice. May all of us who use these resources apply at least some of their economized funds to fight back against an overweening government that makes them necessary in the first place.


Contact Christopher Westley

Christopher Westley a professor of economics in the Lutgert College Business at Florida Gulf Coast University and an associated scholar at the Mises Institute.