"A License to Steal"

John Samples of the Cato Institute has a good article today on how the corporate state (government-business partnership) creates the Jack Abramoffs of the world. In this case, it all starts with the government power to determine who can and cannot go into the gambling business.

In a free market, entrepreneurs with ideas and capital can start a business. This freedom to enter a market spurs competition and prosperity while keeping both profits and prices low. In contrast, markets with entry barriers lead to abnormal profits and inflated prices.

In most states, you cannot go out and simply open your own casino even if you have the capital and skills needed to succeed. Once forbidden, entry to the gaming business is now strictly controlled by government licensing and regulation. Under a 1988 federal law, Native American tribes must enter compacts with a state government to start a casino. This licensing itself hobbles entry into the market, thereby reducing competition and boosting profits.

Of course, state governments want a cut of the booty, plus they retain the power to change the terms or to yank a license altogether. You can trace out the consequences for corrupt lobbying from there.