A Stitch in Haste

In my constitutional law class, during our coverage of the history of commerce clause and dormant commerce clause cases, my professor remarked in passing that "for some reason, all the important cases involve either trucks or milk."

Actually, the "reason" is quite obvious:

A maverick dairyman named Hein Hettinga started bottling his own milk and selling it for as much as 20 cents a gallon less than the competition, exercising his right to work outside the rigid system that has controlled U.S. milk production for almost 70 years. Soon the effects were rippling through the state, helping to hold down retail prices at supermarkets and warehouse stores.

That was when a coalition of giant milk companies and dairies, along with their congressional allies, decided to crush Hettinga's initiative. For three years, the milk lobby spent millions of dollars on lobbying and campaign contributions and made deals with lawmakers, including incoming Senate Majority Leader Harry M. Reid (D-Nev.).

Last March, Congress passed a law reshaping the Western milk market and essentially ending Hettinga's experiment — all without a single congressional hearing.

The dairy cartel (actually a "cartel of cartels") has been controlling the milk market ever since the 1930s — back when people were naive enough to believe that politicians are not by definition moral defectives and that government manipulation of the economy could actually be motivated by a concern for "the general welfare" rather than the Politics of Pull. Preserving a cartel by legislative fiat serves one purpose and one purpose only: to enrich producers at the expense of consumers in defiance of the free market.

And — let's be absolutely clear about this — such corruptions are not "capitalism." They are congressionally mandated guild socialism. Nor did this have anything to do with pasteurization or safety or quality. The only thing at risk was the cartel's government-imposed excess profits.

"Crushing a competitor" by outcompeting him is one thing. Crushing him by outpoliticking him is something entirely different and entirely despicable.

So the next time you hear a baby crying for milk — or a liberal crying about milk prices, or prices in general, or income and poverty in America — rest assured that Congress is "doing something" about it.

Just don't think too much about what that "something" actually is.

More thoughts at Point of Law, Market Power, Coyote Blog, Marginal Revolution, Cato.