Back at GMU, Peter Boettke liked to compare tweaks to regulatory regimes to the Three Stooges doing plumbing. Every time Larry turns the monkey wrench to fix one pipe, he’s bashing two other pipes that start new leaks. And then it all descends into slapping and nose-pulling as the basement floods.
Today’s example: Canada’s wonderful dairy supply management system. Some people hate the system for inflating the costs of dairy products for Canadian consumers. But I’m coming to love it for its comedy value. Consider mozzarella cheese.
Fifteen years ago, frozen pizza makers convinced Ottawa to exempt cheese for frozen pizzas from the high tariffs that otherwise protect the supply management system. Restaurants hated the move as frozen pizzas compete with Dominos and the like. This sparked some cheese smuggling. And, according to the Free Press, it also caused this:
So we had this big plumbing mess. Fixing one leak causes others.
And now the Canadian government has created a new mozzarella milk class so restaurant and frozen pizza makers will be on the same footing. If you like blue cheese on your pizza, you’re SOL.
Agriculture Minister Gerry Ritz blames Canadian high prices on economies of scale:
Economies of scale matter, but they’re hardly a first order explanation for high Canadian dairy prices. New Zealand’s supermarket duopoly, despite providing rather high prices for most other things, somehow manages to deliver us a kilo of good cheddar for $9 NZ. Canadians: have a browse down the Countdown (our version of Safeway) aisles. $1 NZD = $0.85 CAD; our 15% GST is included in all listed prices.
But please keep dairy supply management, Canada. Whenever somebody here wants to do something dumb, I love having Canada as “look what happens if you try that” exemplar.