Jonah Goldberg

If Hollywood remade "The Graduate" and set it in 1980, the one word the businessman would have for Dustin Hoffman's character wouldn't be "plastics." It'd be "medallions."

That's because the single greatest investment you could have made over the last 30 years isn't in gold or silver or even Apple stock. It's in New York City taxicab medallions.

Since 1980, New York's taxi medallions -- essentially the license to drive a cab in the Big Apple -- have appreciated nearly 2,000 percent, according to one estimate. Prices rose on average 8 percent annually for 30 years, dipping significantly only once -- right after 9/11, calculates economist Ilan Kolet, a writer for Bloomberg.

Medallions have a better rate of return than Class A Berkshire Hathaway shares because New York tightly controls the number of medallions -- and hence the number of taxis -- permitted on city streets. In 1937, that number was 13,566, and it's hovered around there ever since. Medallions cost 10 bucks in 1937 (roughly $160 in today's dollars). Last year, two sold for $1 million each. Government-imposed scarcity and inefficiency created that value, nothing else.

So it's no wonder that New York's cab industry loves its regulators and vice versa. The Taxi and Limousine Commission exists to regulate taxicabs. If taxicabs -- as we know them, at least -- go out of business, what's the point of having a commission?

Such thinking has given birth to a national movement to kill Uber and companies like it. A San Francisco start-up, Uber is a car service that you "hail" with an app on your smartphone. In Washington, where I live, it is a life-changer. It's a bit more expensive than conventional cabs, but because I can't hail a cab in my suburban neighborhood and calling for one can take hours (if they show up at all), a fast and reliable car service is a real boon. The fact that it's a much nicer car that has been cleaned more than once since Jimmy Carter was president is a bonus.

When Uber enters a new city, the last thing it does is ask for permission. Instead, it just adheres to existing laws and hopes it can build up enough popularity before the regulators come to shut it down.

"If you put yourself in the position to ask for something that is already legal, you'll find you'll never be able to roll out," Uber founder Travis Kalanick told the New York Times. "The corruption of the taxi industries will make it so you will never get to market."


Jonah Goldberg

Jonah Goldberg is editor-at-large of National Review Online,and the author of the book The Tyranny of Clichés. You can reach him via Twitter @JonahNRO.
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