Lemonade Stands & Liberty

On the blog here. Episode art: Photo by RODNAE Productions on Pexels.com Topic: Kids getting policed for not having a business license It started with a meme. As Libertarians, we know the best way for government to help business is to stay the fuck out of it. So why are they all up in everyone’s right to make a living and support their families? Why does government think it needs to regulate everything from hair weaving and ladyscaping to taxi driving and food preparation? Our take: Business licensing prohibits entrepreneurship. So here’s the story on the lemonade stand aggressively trying to refresh the neighborhood at the market-monopoly rate of 75-cents-per-cup. So what are the regulations for? To protect citizens from unscrupulous business persons? Like 7-year-olds? How about to ensure the government gets its fair share of your efforts? In business, we analyze industries using Porter’s Five Forces (I won’t business nerd to death you guys with this, but…) one of the forces is “threat of new entrants” and the other is “threat of substitutes.” Unregulated markets have low barriers to entry and a high threat of substitutes. It’s not just Red Bull and Monster Energy, it’s every carbonated beverage calling itself and “Energy Drink” and the others have to compete. Which is what they’re supposed to do. But take the case of Uber in London — Cabbies are unionized there and the union put enough pressure lawmakers that they raised the barriers to entry to Uber couldn’t operate. Think about how Air BnB gets around the Hospitality Tax so many cities love to impose via hotels. Regulations are in place to limit competition, not encourage it. And them that makes the regs wins. This week, it was Robinhood, the app for day-trading and gamifying stock market portfolios to interest younger investors. It’s a self-proclaimed “democratization of investing” and yet when thing went wonky this week for the regulated industries — fully within regulations, mind you — Robinhood was pressured to limit the access its investors had to Gamestop stock. Them that makes the gold makes the rules indeed. But … kids? These cops decided to support the young entrepreneurs instead. And true free enterprise is represented when big-time Lemonade Dealer Countrytime decided to get behind those neighborhood stands (link here). So should neighbors be pissed about the traffic and call the cops? Should the city be worried about other businesses taking that lax enforcement as the possibility that they can get away with handy-manning, lawn-cutting, and car-washing without expecting law enforcement to shut their operation down? What about those fundraising “businesses” (cheerleader car wash) that don’t have permits? And that freedom to assemble that also shouldn’t need a fucking permit? Can we call city and county permitting what it really is? A cash grab? Authoritarianism? Busy-body-ness?