Even the most avid regulator understands that government regulation is not usually popular with the general population. As such, they are always coming up with excuses to justify some the regulations they propose.

Often, the excuse is that the particular market they want to engage is somehow different than other markets. Of course, they say, we don’t support heavy regulation, But this market needs regulation because, well, it is different than all other markets. Funny, though, how they keep finding markets that are different from all other market.

A Wall Street Journal commentary by David B. Rivkin Jr. and Lee A. Casey identifies the latest unique market:

ObamaCares defenders have sought to manufacture another limiting principle. They claim that health care is unique because everyone will use medical services, health-care costs can be financially ruinous for uninsured individuals, and others will then have to pick up the slack by subsidizing consumers who do not pay their medical bills. Yet any number of national markets, including the housing market, share these same characteristics.

We documented in 2006 similar calls for regulating “unique” markets in Texas when it comes to regulating the homeowners insurance market:

There have been other calls for price regulation because of the market’s alleged inability to properly regulate homeowners insurance prices. Two such criticisms claim there is an inelastic demand for homeowner s insurance but large fluctuations in supply, along with a limited supply. Market critics contend that people have little choice but to buy a fixed amount of insurance, either because they are required to in order to get financing or because they are unwilling to bear the risk of losing the entire value of their home. They also assert that the high cost of entering the Texas homeowner s insurance market keeps the number of companies low.

Other reasons used to justify price regulation of the market include consumer ignorance and stickiness. According to these theories, consumers are too busy or overwhelmed by the complexity of the product, and thus can t really make meaningful choices in the market. This can be proven, critics claim, because of stickiness in the market, i.e., too many consumers staying with their original insurance companies even though there are cheaper alternatives.

We don’t need special laws for special markets. Instead, regulation of all markets should be on the margins keeping the transactions voluntary and free from government interference. We should also provide market participants with a well functioning, inexpensive civil justice system where they can go to right wrongs when needed.

There’s nothing special about individual markets, except that they work.

-Bill Peacock