Regulatory Policy

Free-Market Victories down the Ballot

Drivers drop off their mail-in ballots at the Registrar of Voters for San Diego County in San Diego, Calif., October 19, 2020. (Mike Blake/Reuters)
While most were focused on the presidential election, down-ballot votes delivered victories for free enterprise.

The top of the ticket got most of the press, but for free-market enthusiasts, much of the real 2020 action was down ballot. As of this writing, the presidency is still undecided, but neither candidate offers a great deal from a free-market perspective (which is not to suggest that there was no difference between them in this respect). A divided Congress is ultimately more important, as are free-market victories in California, Illinois, Oregon, and Washington State.

Congress will likely remain split between a Democratic House and Republican Senate, which guarantees a divided government no matter who wins the presidency. Together, their division can provide an important check on executive power, as the Founders intended.

Each chamber can also check the other’s partisan excesses, and hopefully add some modesty to grand legislative plans that could further harm the COVID-19 recovery.

At the state level, voters in several states did a lot better than mere damage control. There were some outright free-market victories.

California voters passed Proposition 22, partially undoing Assembly Bill 5 (AB5), which put thousands of independent contractors out of work right when the pandemic hit. The bill was originally intended to encourage gig workers to unionize by requiring ridesharing companies such as Uber and Lyft to classify their drivers as employees, not independent contractors. But AB5 overshot its mark and put thousands of other independent contractors out of work, including journalists, translators, office workers, actors, musicians, and production crews.

The California legislature passed an “oops” bill earlier this year to exempt these unintended casualties and refocus on the big ridesharing companies, but that still would have doubled the cost of ridesharing and delivery services. Some gig companies began making plans to leave California, which would have harmed consumers and workers alike. So voters passed Proposition 22, leaving the original AB5 bill a shell of its former self.

While they were at it, California voters also said no to expanding rent controls, finally heeding the warnings economists have been shouting since the 1940s.

New York and other states are considering their own AB5-style measures. The federal PRO Act, which passed this Congress and will likely be reintroduced next session, would implement a nationwide version of AB5. The prospects for these have now dimmed.

Illinois voters said no to giving their legislature the ability to raise taxes more easily. The Illinois state constitution requires a flat income tax. The Fair Tax Amendment would have changed that to allow a progressive tax and would have made tax increases easier. The Illinois legislature had already passed a separate tax hike bill, conditional on voters approving the amendment. Voters disapproved by a 55–45 margin, and taxes will remain as they are.

Oregon decriminalized possession of hard drugs. Five other states legalized marijuana for medical or recreational use, including socially conservative Mississippi. Oregon and the District of Columbia also decriminalized hallucinogenic mushrooms. These are important libertarian victories, and not in the snickering libertine sense. These are victories for the rule of law.

In order for people to respect the law, they have to be able to respect it. That was a major cultural cost of alcohol prohibition in the 1920s, and of the drug war today. Drug legalization allows law enforcement to focus on real crimes and ease an avoidable source of antagonism between police officers and the communities they serve — especially in minority areas where drug laws are disproportionately enforced.

Washington State voters came out against a plastic bag tax. However, the vote is non-binding. Instead, voters have officially advised the legislature to repeal Senate Bill 5323, which instituted a plastic bag tax. The legislature is free to ignore voters’ advice, but they shouldn’t. As my colleague Angela Logomasini notes, pushing consumers towards reusable bags can make it easier for germs to spread, and we’re in a pandemic. Moreover, bag taxes and bans do not achieve their touted environmental goals.

While Trump and Biden dominate election coverage, voters have also paid attention to other matters. It is heartening that in some important cases, they chose well.


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