America’s culture wars threaten its single market

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For business, interstate trade is becoming a politically charged minefield

California has the privilege of being a colossal market irresistible to manufacturers, so some of its rules become standards well beyond its borders. But it is not unique in wanting to go its own way. Across America, a mishmash of regulations from state to state differ on everything from how to manufacture lifts and how to produce liquor to how to run a bank. In theory that is all well and good. Regulatory experimentation can be healthy. In practice it creates a minefield.

Companies face several challenges. The first is legal, exemplified by moves to ban abortions. Take Walgreens, America’s second-biggest pharmacy chain, which this year found itself in a Catch-22. In February it received a letter from 20 Republican attorneys-general warning it that it might be breaking federal and state laws if it mailed mifepristone, an abortion pill, to their states.

The third pitfall has to do with greenery. According to Ropes & Gray, a law firm that tracks environmental, social and governance legislation, states are introducing contradictory regulations about oil, gas and coal investments. In 2021 Maine, a blue state, got the ball rolling with legislation prohibiting its public pension fund from investing in big fossil-fuel producers, and set out a timetable for divestment.

 

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