Picture: THINKSTOCK
Picture: THINKSTOCK

IT WAS dark, very dark. It was an accident scene. The CEO of a big company crashed into my car at another failed traffic light during another blackout caused by another failed government monopoly, Eskom.

Fly-by-night tow-truck vultures descended on us from the darkness. They knew, as if by magic, where to seek prey. Being accident victims with minor injuries, the CEO and I were shaken and potentially vulnerable. The vultures pointed to water under the radiator of the CEO’s top-of-the range BMW. Without water, they explained, his engine would overheat and burn out if he drove it. They offered to tow it from the scene, keep it safely, and tow it to its final destination when required.

Also, as if by magic, I heard an angelic person interviewed on an angelic radio station the next morning. He knew all about the industry because he was the CEO of a national association representing it. He described in detail how "rotten apples", in an otherwise supposedly worthy industry, fleece motorists at accident scenes. They do such dastardly things as pouring water and oil under cars to induce hapless motorists to have vehicles towed to sinister places.

"The problem", the towing service man explained, "is that the industry is unregulated."

I knew what was coming. The gullible radio host swallowed every smooth-tongued word and agreed that regulation is long overdue. It never entered his mind that there is no such thing as an unregulated activity.

All businesses are governed by centuries-old common law, which outlaws fraud and breach of contract of the kind the spin doctor said is "unregulated". Besides common law, which, if enforced, is perfectly adequate for all legitimate consumer protection, every enterprise is governed by a surfeit of statutory controls. If there is no overtly dedicated law, it is deceptively called "unregulated".

A bigger threat to consumers than fly-by-night operators in any field is regulation at the behest of insiders faking integrity. The standard stratagem of self-serving insiders is to call outsiders "fly-by-night operators", "bucket shops", "rotten apples", "rats and mice", "industry dregs", and so forth.

Beware such terms. They are used to legitimise stifling controls and entry barriers against dynamic, flexible and innovative competitors, especially emerging black-owned businesses. Last week, for instance, Parliament was subjected to a diatribe of disinformation along these lines to justify "twin peaks" regulation of the financial sector. The case for expanding the size and cost of the Financial Services Board and the South African Reserve Bank amounted to an admission of failure. The pretext for more power and waste is how bad things are in previous rounds of power and waste.

Pierce the veil of smooth-tongued rhetoric and you find vested interests behind industry regulation getting into the castle and pulling up the drawbridge behind them. What they mean when they speak of "regulation" is government protection from competition, innovation and consumer freedom to choose.

If the industry association has its way, the government will impose additional controls at consumers’ expense. There will be fewer tow trucks serving consumers, fewer small business opportunities, more bribery and corruption, higher prices, and less innovation. Towing services will take longer to get to accident scenes, with adverse traffic hazard and safety implications.

What should be done to protect us from what the CEO and I experienced? Enforcement of existing laws. Apart from all the protection of common law, there is the Consumer Protection Act. What is its purpose if not to protect consumers from sharp operators? If industry association members cannot get to accident scenes quickly enough to compete with dodgy competitors, and cannot promote awareness of what they offer, imagine how much worse they will be when protected from competition.

• Louw is executive director of the Free Market Foundation