One of the greatest strengths of Henry Hazlitt’s Economics In One Lesson is its ability to see the role of interest groups in economic policy. He doesn’t fall for the dubious idea that certain types of economic policy are adopted because they are more logically sound or more convincing. New laws and regulations aren’t adopted because someone made a convincing argument on the floor of Congress one day. On the contrary, Hazlitt knew, most laws are borne out of pressure groups that want a certain type of law to benefit them and their friends. There’s a heavy tariff on sugar? Gee, do you think that the domestic sugar growers might have something to do with it?
Unless we know the history of certain industries and aspects of American society, it’s easy to be totally unaware of the role that certain interest groups have had in shaping even the most mundane things in daily life. We assume that the way things are now is the way they always were. Or if we know that’s not the case, perhaps we think that things changed out of some kind of natural consensus that was reached. In the presence of the modern regulatory state, that’s always a bad assumption. Why is it illegal to cut hair or practice medicine without a license? Hint: It has something to do with interest groups.
In this Vox article, the author examines the role of auto industry lobbyists in creating the invented crime of “jaywalking” in which it is the pedestrian’s fault if he gets hit by a car:
Before formal traffic laws were put in place, judges typically ruled that in any collision, the larger vehicle — that is, the car — was to blame. In most pedestrian deaths, drivers were charged with manslaughter regardless of the circumstances of the accident...
The idea that pedestrians shouldn’t be permitted to walk wherever they liked had been present as far back as 1912, when Kansas City passed the first ordinance requiring them to cross streets at crosswalks. But in the mid-twenties, auto groups took up the campaign with vigor, passing laws all over the country.
Most notably, auto industry groups took control of a series of meetings convened by Herbert Hoover (then Secretary of Commerce) to create a model traffic law that could be used by cities across the country. Due to their influence, the product of those meetings — the 1928 Model Municipal Traffic Ordinance — was largely based off traffic law in Los Angeles, which had enacted strict pedestrian controls in 1925.
“The crucial thing it said was that pedestrians would cross only at crosswalks, and only at right angles,” Norton says. “Essentially, this is the traffic law that we’re still living with today.
Since most roads were owned by local governments in this period, it’s hard to say how pedestrian-auto interactions might have developed had roadways been mostly privately owned. Chances are there’d be much greater diversity in how people view so-called jaywalking or how cars and pedestrians should interact. This is, as Walter Block might say, an “entrepreneurial problem” and solutions could vary greatly from place to place. Already we have some of those towns (usually college towns) where you’re supposed to stop for pedestrians in crosswalks that aren’t at intersections. People often complain about these because they require people to act contrary to what they’ve been conditioned to think about pedestrians for most of their lives — thanks to those auto industry lobbyists of old.
Would similar situations arise in a world of free-market roads? Almost certainly, since road rules would vary considerably to match the preferences of different populations in a presumably much more decentralized world. This also helps illustrate why powerful interest groups prefer centralization: it’s cheaper to force everyone to conform when there’s one statewide or nationwide law. Highly-localized or private ownership is a much greater challenge to them, and often makes lobbying not worth the effort at all.
