A Quiz for Persons Who Believe That Legislation Can Keep Big Money Away from the Politics of Big Government

by Don Boudreaux on January 6, 2010

in Markets in Everything, Myths and Fallacies, Politics, Prices, Reality Is Not Optional

Compelling evidence emerges to reveal a huge, spectacular diamond buried 3,000 feet beneath the surface of an otherwise ordinary vacant lot in Anytown, USA.  Experts are certain that diamond merchants will pay at least $25 billion for this raw gem.

Anytown’s city council enacts a statute declaring it to be a criminal offense for any individual to spend more than $10 on the process of extracting this diamond, and capping the total amount that can be spent extracting the diamond at $100.  Upon signing this statute into ‘law,’ Anytown’s mayor proclaims that “The influence of big money is unseemly, corrupting, and unfair.  With this legislation, Anytown says ‘No’ to the monied interests!”

Question: What is the upper limit of the total dollar value of the resources that, in fact, will be spent to extract this diamond?

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