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Jeff Jacoby

Medallion madness

In New York City, where the number of taxicab medallions is fixed at 13,237, the only way to get one is to buy one from an existing owner. In New York City, where the number of taxicab medallions is fixed at 13,237, the only way to get one is to buy one from an existing owner. (Frank Franklin II/Associated Press/File 2006)
By Jeff Jacoby
Globe Columnist / November 6, 2011

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Two New York City taxi medallions were sold last month for $1 million apiece. That’s the highest price ever paid for the right to operate a car as a taxicab in the City That Never Sleeps. It’s also an expensive lesson in the harm caused to consumers and would-be entrepreneurs by overregulation and the strangling of competition. This is a classic illustration of what economists call “rent-seeking’’ - manipulating the political system to gain economic benefits without providing any additional value to society in exchange.

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