Sunday, March 12, 2006

The MOT Should Not Exist

Lance Dutson got a long reply from Thomas McCartin, president of Warren Kremer Paino, concerning his muckraking on the Maine Office of Tourism Pay-per-gate issue. Go here to read the whole letter.

I'm going to address just one point that Tom raises, since it's the thorn that got under the libertarian skin of yours truly. I'll leave the defense of the facts of the case to Lance.

Here's one part of Tom's rebuttal:

Your next post furthered a campaign of innuendo, falsehoods and incorrect statements. Referring to (NMC), you state "they were responsible for wasting thousands of taxpayer dollars…" and later "forcing thousands of Maine businesses to pay artificially-inflated advertising rates". You imply that all of this was done "outside of the jurisdiction of the MOT". The fact is that no taxpayer dollars were wasted, no one was working outside the areas of their responsibility, and bidding for words that you intend to buy does not artificially inflate the price of those words at auction. Bidding for words is part of the competitive nature of the business and there'’s nothing artificial about that. There is something foolish about bidding against a potentially stronger player in the process when you can have the benefit of that players effort for nothing by simply linking appropriate products, such as a hotel in the Camden region linking to the MOT site rather than fighting for the same word.

Let's start with "artificial." Markets, free or not, are by their very nature human constructs, and therefore by definition artificial.

What we do have here is a perversion of the market that would have arisen free from government influence. Think about it. These Maine businesses in the tourism industry are having taxes forcibly taken from them (and we who are not in the tourism industry are also having the taxes taken forcibly from us). Then, the Maine government decides to put the money to use in a way that either increases the pay-per-click advertising budgets of those selfsame businesses, or decreases the effectiveness of the budgets they already have.

The part about the foolishness of "bidding against a potentially stronger player in the process when you can have the benefit of that players effort for nothing by simply linking appropriate products" defines the two opposing worldviews here. On the one side stand those who want to advertise their specific businesses to people who are searching on Google for their services. On the other side stand those who want to generally promote the idea of using services like theirs, and who hope that their businesses will receive a portion of the general economic activity that arises from the effort.

Either strategy could have its advantages. What makes the second strategy wrong in this case is the lack of voluntarism. If a group of businesses wants to voluntarily pool their advertising dollars to promote tourism in Maine, so be it. Just don't force businesses in the industry (and people and businesses who are not in the industry) to subsidize the effort. Funds are diverted from how they otherwise would have been used (both in the tourism industry, and outside it) at the whim of those who are in political or bureaucratic power at the time. And government has shown a very poor track record of picking which industries or businesses should be subsidized.

Simply put, the Maine Office of Tourism should not exist as a government body. Let it become a voluntary membership organization.



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