I'm not sure I'm comfortable with the idea of regulating the numbers of businesses to protect profits for those already existing.
This is the basic principle behind agricultural subsidies and regulations. In some fields, if you don't prevent the market from being flooded with providers you end up with a race to the bottom which overshoots the bottom and actually kills the industry. (Farmers in the 1930s amped up production so much that prices fell below costs and the market could not absorb the food; productive farmers went broke.)
Not that I'm convinced that this case is one of those situations.
I think the kind of regulation that they're proposing is actually a really good idea. Beyond the correlation with crime, the rush to open more of these businesses is classic bubble economy behavior. In this case, it is literally a type of gold rush atmosphere. On a much, much smaller scale, this rush to open gold buying shops is the same thing that we saw with various housing related industries during the housing bubble. When that bubble collapses and music stops, most of these business owners won't have a chair to sit down on. If he collapse of these businesses only had an effect on the business owners, I'd say that's the risk you take. But there's a social effect of lost jobs, empty store fronts, etc, etc that also goes with the sudden collapse of an industry in a bubble. It drags a lot of innocent people down with it.
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This is the basic principle behind agricultural subsidies and regulations. In some fields, if you don't prevent the market from being flooded with providers you end up with a race to the bottom which overshoots the bottom and actually kills the industry. (Farmers in the 1930s amped up production so much that prices fell below costs and the market could not absorb the food; productive farmers went broke.)
Not that I'm convinced that this case is one of those situations.
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