Tag: Regulations

Licensed Into Poverty

Conor Friedersdorf has an enragifying article about how permits and licenses are strangling the American economy. After using the example of Burns Harbor — a small town with a terrible economy that now requires onerous permits for any business, he summarizes:

The normal mindset among U.S. officials is that prior permission should be required to sell legal goods to a willing buyer. Kids selling lemonade on the street are shut down. A Missouri man has been fined $90,000 for selling rabbits (he made about $200). In Illinois, an artisan ice cream maker is being shut down for lack of a dairy permit. Manuel Winn was arrested, handcuffed, and booked for selling magazines door-to-door without a permit. A Maryland mother of three was arrested for selling $2 phone cards without a license. Lots of municipalities are going after food trucks. A group of Louisiana monks had to go to court to win the right to sell simple wooden caskets to consumers.

If you read enough of these stories, you’ll see the targeted entrepreneurs say the same thing again and again: I just had a good idea and started a business. It never occurred to me that I needed permission. And, of course, other would be entrepreneurs don’t ever get started because they’re too intimidated to assess and grapple with the bureaucratic hurdles. Or else the regulations are written in a way that excludes from commerce folks who are operating at a very small scale.

I can see licensing, say, doctors or airline pilots. But we’ve gotten to the point where beauticians, decorators and food vendors — businesses people can start with talent and a business card — are closed off. A quarter of American jobs now require some official license or permit.

Big business, needless to say, loves permit and licensing requirements. These are much easier to handle when you’re an established million dollar business as opposed to a small thousand dollar business. And brick-and-mortar stores are delighted when the authorities chase away taco carts and raid a salon run out of someone’s living room.

But we are strangling entrepreneurship. And strangling it most viciously in communities and demographics that are struggling. Many is the American whose success in life started with a small food stand or a neighborhood beauty salon. But self-important assholes at all levels of government have decided that entrepreneurs must genuflect to them; must beg and pay for the privilege of growing the economy.

This is something that should be non-partisan. Conservatives and libertarians should be fighting this for economic freedom. And indeed, the eeevil conservative Institute for Justice is doing all they can, having won a huge victory for the Louisiana monks. Liberals should be behind this too, however, since these regulations trap poor people in dependency. But every time Matt Yglesias brings this up, he gets hammered by his readers.

This probably requires action at the state level, since fighting this regulation-by-regulation is like fighting Lernean Hydra. Governors need to be putting in laws or amendments establishing a basic right to do business. But is anyone going to run on this kind of platform? I’m not holding my breath.