The Permit Power, The IRS and The Troll Under The Bridge
Since August or September of 480BC, Western Culture has been well aware of the power multiplier that comes with establishing and holding a choke point. When King Leonidas of Sparta held a vast army of Persians at bay for several days with a smaller force at Thermopylae; the world then knew that chokepoints were strategic fulcrums from whence power could be leveraged far beyond its initial limits. The economic analog to such a chokepoint is the monopoly. The government permit power is just such a chokepoint generating function to empower the state beyond its circumscribed constitutional limits.
When the government controls activity via permit, they are able to do several things that go far beyond their enumerated Constitutional powers. They can pick winners and losers. They can dictate the size and scope of activities without having to depend on the approval of courts or legislators. An agency wielding permit power can skim a surplus off the top through fees that go beyond the cost of providing inspection and certification related to the permit. Like a gang of brigands controlling a bridge, a regulating agency can use the permit power to dictate who gets to pass, how much traffic traverses the road and how much in bribes have to be paid in order to get across the riverRead More »