75-01-B8
- Main Page \ Reagan Radio Commentaries \ 1975
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Fair Trade[edit]
Transcript[edit]If you're willing to buy a product at a low price and I'm willing to sell it to you at that price, should there be a law that says I can't do it? Well, there is. I'll be right back. One of the old-time ventriloquist tricks in Vaudeville was done by the fellow who'd sing a chorus of Yankee Doodle Dandy while drinking a glass of water at the same time. Another version is even trickier. A business or industry argues for free enterprise on the one hand, free, that is, from the heavy hand of government regulation. At the same time, it asks government to set a minimum price by law on the product it sells. This trick is called the fair trade law, really a retail price maintenance law, which has been with us for quite a while now, though such laws date back to the turn of the century, federal courts knocked them out in 1911, but they were back 20 years later when California retail druggists were worried about price wars and sought minimum price legislation. Soon, after 43 other states enacted so-called fair trade laws in recent years, there's been an indication that this trick is going the way of the vaudeville act. It's estimated that only about 20 large companies use the laws extensively and several states have done away with them entirely, but 14 states representing nearly half the nation's retail sales still have tough enforceable fair trade laws. This means that a retailer wants to sell a fair trade item below the stated minimum price may risk heavy fines or even jail for cutting his price to consumers. Big discount chains won't sign fair trade agreements, in most cases, but small retailers may still fear being cut off by popular brand items if they don't observe the fair trade agreements they may be asked to sign. It used to be argued that fair trade laws help small retailers like the corner grocery from being severely undercut by big chains with superior buying power. I hope there'll always be a place for independent neighborhood retailers and I think there will, but it's more likely they'll survive because they're convenient and because of a few sense difference on a brand of liquor or lipstick or drinking glasses. The pro fair trade forces argue that the higher margins provided the retailer by fair trade result in more retailers carrying the line and with a broader selection at that. Well that may be true, but in an age when advertising has effectively pre-sold so many brand names, is the retailer really providing any extra useful service to the consumer in exchange for that higher margin? It's nice to know that he carries a broad selection, but without fair trade, wouldn't an enterprising merchant carry as broader line of say cosmetics as his customers demand? Recently Attorney General Saxby said in a speech to a grocery manufacturing group, whatever feeble justification may have once existed for fair trade there is today no reason to place such heavy burdens on the consuming public. Lately, there's been a lot of talk about taking a hard look at government regulation in order to weed out those regulations which stifle competition. Good, let's include the fair trade laws too. Once you invite the government to regulate you in order to protect your economic interests you're asking for a lot more regulation down the line. We live in a time when the barnacles of government regulation have added measurably to the cost of goods we buy let's rethink the fair trade laws without them you just might find some prices going down and wouldn't that be refreshing for a change. This is Ronald Reagan. Thanks for listening. |
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