Your premise is flawed due to the fact that I have few skills (grin).

The point is not to promote consolidation of industries. The bill made sure the companies could do the work and it help break up the influence of large companies. Smith warned about undue influence of large companies. If a small company cannot do the work they should not get the business and it is a small percentage anyways.

As a skilled lawyer I am sure you will have a great come back!

Shucks, thanks! Since Bill Simon is always so concerned about my “receivables” and “accounts,” for you I’ll work pro bono.

Adam Smith was a firm believer in the virtues of laissez faire capitalism.

Then I, again, am not sure where the lectures are coming from both with you, the professor in Scotland, and elsewhere. At its core, my comments and position stand true and in line with Smith’s. You can talk about Smith’s belief in the destructive power of monopolies to the free market, but that is not what is at issue here because I don’t see only one construction company handling all road work in Georgia.

What we are talking about is introducing market inefficiencies into the system through this Senate Bill.

I still love you and would use as my lawyer anytime!

http://adamsmithslostlegacy.com/2009/01/blogger-attacks-others-for-not-knowing.html

Using your scenario, would it not be more efficient to pass a law forcing GDOT to break projects up into the smallest possible task, then seek a new bid for each task?

In such a system, the small business that only does guard rail installation could win on that piece, even if the larger company wins out on all the rest.

Of course, that could just be the way my brain works/the way I was trained.

How do you build a multi-million line of code program?

One piece at a time.

The bids will be restricted to large companies capable of the complete project.

Let’s say there is a small business that specializes only in guard rail installation and is able to install guard rails more efficiently and at a reduced cost to the State. The small business wouldn’t be able to bid on guard rail installations because bids were only accepted for the complete project, even though they could install guard rails cheaper than the large company.

If this bill causes the GaDOT to alter the bid process in a way to save money, I support it.

That said, I personally HATE the ‘innovation’ of concrete roads rather than asphalt. It makes driving on a cloudy day or in rainy situations an absolute NIGHTMARE for those like me with any kind of eye trouble. Just throwing that out there in case anyone with any kind of authority in GDOT is looking at this.

back on topic: not a fan of earmarks for ANYTHING. If the small business can outbid the larger business, GREAT. If not, tough luck. But if the larger business gets the deal because the owner knows someone with influence, that corruption needs to be eliminated.

Everything you are saying is true. It’s just that DOT projects are large. RFP’s can get you around the low bid procedure. However, a small company will have to become large in order to do DOT projects.

Why does a company have to be large to be skilled? I have used many vendors and size does not always equate to skill or good service. Also the lowest price does not always cost you less in the long run. Many times you pay for what you get.

Even if a DOT job asks for a RFP – you still want a company large & skilled enough to handle the project.

10% of DOT’s project budget is a significant amount.

Keynesian Republicans are now in the majority.

Adam Smith’s Dead Hand

http://www.tuppenceworth.ie/Politics/smithhand.html

FYI

…..Adam Smith was a firm believer in the virtues of laissez faire capitalism. He is often quoted and referred to by economists and monetary gurus. Adam Smith was in his day, and often since, criticized for having no sense of feeling for the violent swings and displacements that could be caused should capitalism be allowed to run along its merry untethered way. People would suffer unemployment. The cost of goods or seed grain might fluctuate wildly. People might play speculation games in the market that would create havoc in an otherwise stable system. Crashes in the market would leave people devastated. Now there are those who will tell you that such bubbles and dashes of market vagaries wouldn’t happen in a truly pure and unfettered market economy.

Surprisingly, the often misquoted Adam Smith was not among them. Adam Smith believed that there should be limitations on what corporations should and shouldn’t be allowed to get away with. He thought that the English South Sea Bubble scandal of 1711 was an outrage and exactly the kind of thing the public should be protected from. During it’s run of power, members of parliament took bribes, and members of the corporation got rich, and members of the public got bilked while the worthless stock rose from 128 pounds to 1700 pounds and plummeted back down to 128 pounds again in a single year, purely from speculation urged on by the South Sea Company. The South Sea Company was one of the first corporations ever founded and one of the earliest examples of manic greed speculation. The company was supposed to have been preparing to trade with the new world, when in fact the treaty rights it held with Spain only allowed for one or two cargo loads per year. The company had grand schemes, but really nothing to do with itself. So the worth of the company existed on paper and in the hype of it’s owners, trading and reissuing new stock, much like Enron today.

Smith also believed that monopolies were the death of the free market, and that the government should do whatever it could to step in and break up monopolies when they formed to insure just competition for the worth of labor. But even more than government regulation, which he believed should be kept to a minimum, Adam Smith was a deep believer in something he called “the unseen hand” – a magical force that would somehow curtail man’s baser nature and insure mostly just dealings for most people most of the time…….

Additionally, there are a large number of firms competing in this market area. Therefore the “loss leader drives out competition” argument lacks empirical support and is a red herring in this context.