Especially in tough economic times, onerous rules for starting a small business are a burden on the worst off among us
In a small municipality on the shores of Lake Michigan, a town council passed a law earlier this summer that is especially objectionable in tough economic times. "It is in the interest of public safety and welfare to require certain individuals to obtain a license before conducting solicitations or making sales transactions throughout the town," the Burns Harbor, Indiana, ordinance states. Put simply, if you aren't a resident, you'll need an expensive permit to make or sell anything, whether on the street, door-to-door, or in a brick-and-mortar business inside town.
What's required for a permit?
One hundred dollars, getting fingerprinted by police, and a criminal background check. "If the applicant has been convicted of any misdemeanor or felony, the permit application may be rejected," the law states. And if you're granted a 30 day permit? Once it expires, you're ineligible to apply again for six whole months.
This is the sort of story that makes me furious. Burns Harbor officials insist their law is necessary to protect public safety, but from 2001 to 2009, an eight year stretch before the law was passed, the town had zero murders, zero rapes, and three robberies. Its police presence is 4.36 officers per 1,000 residents, compared to an average of 1.87 officers per 1,000 residents elsewhere in Indiana. Meanwhile, there are high unemployment rates and tens of thousands of people on food stamps in the surrounding Lake Michigan region. Few firms are hiring. People are looking for a way to make a living. Some of them want to sell stuff. Why burden them? Why force folks to be fingerprinted like a criminal if they want to hawk goods at a local flea market? Why exclude from commerce people convicted of a mere misdemeanor? In a global economy, why should a traveling salesman be allowed to sell his goods only at 6 month intervals inside a town of 1,156 people?
The town council is abusing its authority. Alas, theirs is a common attitude. 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.
These needless, onerous regulations would be objectionable at any time. But they're particularly problematic when many Americans find themselves unemployed, needful of income, and thrust into the position of doing what they can to get by. That may mean a series of garage sales, or selling fruit from a backyard tree, or making a craft to offer for sale on the street, or going door-to-door offering handyman skills, or any number of other informal businesses. We're making things harder on the least advantaged among us, and some are forced to take more social welfare because laws prevent them from making a living on their own.
This isn't a jeremiad against all government regulation. Should commercial airline pilots be required to have a license? Sure. Are zoning restrictions sometimes legitimate? Of course. But is society really going to suffer if lemonade vendors, casket makers and purveyors of $2 phone cards sell their wares without permission? The default should be that free citizens can engage in commerce with one another, sans any prior restraint by federal, state, or local governments. It's time to deregulate.
Image credit: Reuters