15 January 2016

The USA: Big Country, Big Government?


The USA. To people on the right in the UK, it is sometimes imagined as a libertarian utopia. No EU bureaucrats. None of Ed Miliband’s Green Taxes. Freedom to smoke, drink and own guns. These things are all true to varying extents. But the USA is also home to a surprising amount of protectionism, big government and red tape. Here are a few examples…

Now wash your hands

We all know to wash our hands after using the toilet? The federal government isn’t so sure. Chapter 6, Paragraph 301.14 of the FDA Food Code 2009 requires ‘a sign or poster that notifies food employees to wash their hands’ to be visible at all sinks used by food employees. Use the bathroom in any restaurant in the USA and you will see one of these signs. Last year, Sen Thom Tillis from North Carolina suggested a more market-orientated solution – let restaurants with a handwashing policy take their signs down, and require only those restaurants who do not have a handwashing policy to put signs up saying so. Customers who cared about hygiene (i.e. everyone) could then vote with their feet. Would you eat a chicken sandwich in a restaurant that had a sign up saying staff did not need to wash their hands? Me neither. Sadly for the free market, Sen Tillis’ proposal made for some amusing headlines, but otherwise had little impact.


As CapX reported back in August, restricted competition among US airlines has led to high fares, poor service and allegations of price fixing. Flights within the US are twice as expensive per mile as flights within Europe. Unlike the single market, which has made air travel increasingly accessible to ordinary Europeans, the US seems content with the status quo. A consortium of transport industry lobbyists is pushing to keep air transport outside of TTIP, and has already secured the support of 158 members of Congress. The US is a wonderful place to visit, but don’t come expecting cheap flights.


Jeremy Corbyn eat your heart out – passenger rail services in the USA have been nationalised since 1970. The railroad joined the nation together in the 19th century, but its fortunes waned in the 20th century as private car ownership boomed. Faced with the financial collapse of this strategic piece of infrastructure, President Nixon signed the Rail Passenger Service Act and established Amtrak, the state owned enterprise that is still responsible for passenger rail in the US today. The railway tracks, and the profitable freight industry remain in private hands.

Passenger rail is undoubtedly more coherent in the US – that’s a key benefit of having a single operator. But ticket prices and journey times matter too. On these measures, the US compares poorly with the UK.A standard single ticket from Boston to New York costs $76 and takes just over 4 hours. Take the ‘express train’ and you can make it in 3hrs 35mins, but the price rises to $115. By contrast, a single ticket from London to York starts from $73 and takes between 1hr 52mins and 2hrs 20mins. In each case, the distance is around 210 miles. A bigger worry is Amtrak’s dodgy safety record: its trains lack basic safety devices that have been standard in the UK for decades. Last year a train derailed near Philadelphia, killing 8 and injuring more than 200. Rail deaths have been creeping up, from 695 in 2009 to 813 in 2014. Politicians calling for nationalisation in the UK would be advised to take a look at the US before claiming it will deliver the benefits they claim.


The US has got to be one of the best countries in the world for a road trip. But if you go out for a drive in New Jersey, don’t try to fill up the tank by yourself – that’s been banned since 1949. New Jersey’s Retail Gasoline Dispensing Safety Act was ostensibly passed in response to concerns about customer safety – but it may have had as much to do with lobbying and anti-competitive behaviour by the Gasoline Retailers Association. A similar ban on self-service also exists in Oregon, though it has recently been relaxed – Oregonians driving private vehicles may now pump their own gas, albeit only in rural areas and during off-peak hours. Chris Christie says that if he becomes President he will get regulation under control – but he was unable to shift New Jersey’s gas station law in his six years as Governor.

The US is a great, enterprising nation. But it is a mistake to think it is not also a victim of bureaucracy, cronyism and unnecessary regulation. In many ways it has a lot to learn from the UK, and even the EU.

Amy Woolfson is a Kennedy Scholar at Harvard Law School.