Is It Policy Or Profit-Making?
Positions On Laws As Diverse As Sunday Shopping In The UK And Direct-To-Consumer Auto Sales In The US
Driven By Self-Interest, Not The Public Good
Jim Prevor’s Perishable Pundit, May 11, 2014
In the United Kingdom, there is renewed attention to the possibility of reducing restrictions on Sunday hours for large stores. Right now, stores over 3,000 square feet are legally restricted to six hours of trading on Sunday.
To many, that does make sense. The Times of London explained the issue in a piece titled, Sunday Shopping Laws Come Under Renewed Pressure From Campaigners:
Campaigners are fighting to make Britain one of the first countries in Europe to abolish all vestiges of trading laws that single out Sunday as a day of rest.
The move is being led by Philip Davies, the Conservative MP for Shipley, in West Yorkshire, who calls the existing rules “a complete nonsense”. …
“If the shop wants to open, the customers want to shop and people want to work, then why on earth is it the business of the government to tell them they can’t?” he asked.
The main restriction is that shops bigger than 280 sq m can open for no longer than six hours between 10am and 6pm on a Sunday and must close on Easter Day and Christmas Day.
The law stems from a compromise agreed in 1994 after a previous effort to liberalise Sunday shopping ended in a rare defeat for Margaret Thatcher in 1986 as the religious right rebelled.
However, campaigners for liberalisation won a significant victory in 2012 when George Osborne ditched Sunday trading laws for eight weeks during the Olympic Games. The decision resulted in a 3.2 per cent rise in sales in September.
The old “blue laws” have faded in America and will fade in Europe. The religious consensus that once made Sundays sacrosanct has faded. In our multicultural world, laws that privilege one faith over another are not going to do well in the west.
Technology, the great disrupter and the source of so much Schumpeterian “Creative destruction,” plays a role as well. Once it was at least theoretically possible to say that a ban on shopping might lead people to have little to do and thus be more likely to go to church and tend to family, but with the Internet a 24/7 shopping opportunity, restrictions on brick-and-mortar shops seem to just disadvantage them over their internet competition.
With religion somewhat sidelined and the Internet making the law seem stilted, what does hold back complete liberalization? The answer is that it is the same source that makes people around the world unhappy with conservative parties -- the sense that they may speak of principles such as free enterprise but, in fact, act in service to business interests.
In New Jersey, there has been a controversy over laws that prohibit auto manufacturers from selling direct to consumers. The battle specifically was around Tesla’s direct sales model, but it applies to all auto manufacturers. Republican Governor Chris Christie failed to state the obvious: that there is no coherent argument for why car manufacturers should not be allowed to sell directly to consumers – without a dealer intermediary – if they would like to sell that way and consumers want to buy that way. Other states, often heavily Republican states such as Texas and Arizona, are also blocking Tesla from selling direct to consumers.
Why do these Republican governors behave this way? The answer is that people who own car dealerships, as small business owners, are the core of the Republican party, and the business owners, predictably, are more interested in using the government to protect their economic interests than in fighting for principles around free markets. The politicians are really not very principled either, so they stick with their rent-seeking supporters – even though this is counter to the economic interests of their constituencies.
Equally, in the UK, the politics around the issue of Sunday closing are unprincipled, as the Times article goes on to state:
The industry is divided. Large chains that operate smaller convenience stores in addition to large outlets tend to argue that there is no need for liberalisation. “The current situation is a good compromise,” a Sainsbury’s spokeswoman for B&Q said. The John Lewis Partnership-owned Waitrose said that it was not pushing for change.
Industry experts point out that margins are much tougher in big stores. “You’re going to pay a higher price for a basket of goods in Tesco Express than in a big Tesco store,” said a senior executive in private equity who specialises in retail.
Chains operating large, cheap superstores, such as Asda, Wm Morrison and B&Q, favour liberalisation. “Legislation should allow us to open when the majority of our customers wish toshop,” a spokeswoman for B&Q said.
In other words, those who have only or mostly large stores want the ban lifted on Sunday sales. Those that have small stores and thus benefit from restricted competition want restrictions maintained.
What is lost in the discussion? The interests of consumers and the idea that politicians actually have principles. Debates conducted this way, over direct automobile sales in the USA or Sunday trading hours in the UK, make voters feel it doesn’t matter who they vote for, that nobody is really on their side and that nobody can be counted on to vote in line with their beliefs and values.