Monday, April 8, 2013

Striking a blow for (economic) freedom


Nearly 2-1/2 years ago we blogged about the legal travails of the monks of St. Joseph Abbey in Louisiana with respect to their efforts to construct simple wood caskets and to be able to sell the same to the public as a means of income for the Abbey.

The monks figured there would be a market for the simple hand-crafted caskets in which they had buried their brothers for centuries. Unfortunately, state licesnsing laws designed to protect larger funeral homes/parlors prevented them from doing so.

From PJ Media:

A state licensing law designed to protect funeral directors from competitive forces barred the monks from selling their caskets. The law required that the intrastate purchase of caskets be made only through state-licensed funeral directors at state-licensed funeral homes. This meant: unless the Abbey built or bought a funeral establishment with a layout parlor, a six-casket display room, an arrangement room, embalming facilities, and hired a full-time funeral director who had completed high school, 30 college credit hours, a one-year apprenticeship, and passed a test … the Abbey could not sell its caskets to customers in Louisiana.

The Fifth Circuit has now declared that law to be unconstitutional.

In St. Joseph Abbey v. Castille, the court ruled that the regulations violated both the Equal Protection and Due Process Clauses.

The court ruled that the Louisiana licensing law represented economic favortism in its effective barring of competition in that particular marketplace and that the law did not serve the greater interest of the citizens of Louisiana.

We use the term "rent seeking" from time to time and rent seeking occurs when an individual, organization or firm seeks to earn income by capturing economic rent through manipulation or exploitation of the economic or political environment, rather than by earning profits through economic transactions and the production of added wealth.

Not surprisingly, embalmers and funeral directors make up 8 of the 9 members of the Louisiana State Board of Embalmers and Funeral Directors. Of course, it would serve in their best interests to rig the system in their favor. This is a perfect example of rent seeking where by it is the big dogs in the industry that are writing the laws in a burdensome and onerous fashion that tamps down competition and which force the buying public to pay top dollar (that they may or may not have) for funeral arrangements/proceedings.

The Fifth Circuit Court of Appeals rightly saw this case for what it was. This is a victory for the free market and thus a victory for small(er) businesses and the consumer public.

We've said it before but we will be glad to say it again: show us big business and we'll show you big government protection. They really do go hand in hand.


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