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Free Markets, Dungeon Masters, and A Little Girl’s Lemonade Stand.

Jimmie | August 6, 2010 | Comments (0)

Whenever I hear someone say we have a real free market economy here in America, I have to stifle a bitter laugh. I liken running a business to playing a game of Dungeons and Dragons with a Dungeon Master who loves his dungeon more than the game.. Even if you’ve never played, you know the type I mean — the person so intent on making sure his dungeon worked exactly the way he wanted it to work. Traps always caught even the most clever characters. Monsters never missed with claw or fang. Poisons were quick and deadly and lurked inside even the most mundane box or chest. Our desire to play a game we could enjoy was barely a concern. Needless to say, our characters, and our fun, never stood a chance. They were just grist for the mill, objects on which the DM could unleash his petty whims, because his rules were more important than the game.

Small business are a lot like many characters I’ve played in one of those “death trap” games. Oh, they may successfully navigate the first wave of regulations, or even the second, but eventually they’ll fall into a spike pit or get swallowed by an invincible monster lurking around the corner and that’s that. I had the advantage of rolling up a new character in just a few minutes. Most people who run small businesses don’t have that chance. Their fight is real. They should operate in the flow of a free market that follows predictable rules but instead they have to battle the whims of a hundred anonymous bureaucrats all of whom represent a system designed to hamstring them.

The mountains of regulations, at all levels of government, ensure that America will never have a reasonable free market economy. Businesses will always be burdened with unnecessary and costly impediments devised by do-gooders who believe, deep in their bones, that if a few rules are good, a lot of rules are great. And, inevitably, those rules end up doing more damage than they prevent.

Which brings me to this story from Portland, Oregon. Every month, in the northeast part of the city, residents hold an art fair. There are exhibits, and street vendors, and food and drink — you know the deal. A little girl named Julie, inspired by one of her favorite cartoon characters, wanted to get in on the grown-up fun by setting up her own lemonade stand. Her mom thought it was a great idea and the pair of them set up their little 50-cent a cup stand. Julie, who is seven years old, was careful with her ingredients (pre-packaged mix and bottled water) and equipment (she used hand-sanitizer and a clean scoop for the ice bucket).

And then the trap closed around her.

After 20 minutes, a “lady with a clipboard” came over and asked for their license. When Fife explained they didn’t have one, the woman told them they would need to leave or possibly face a $500 fine.

Surprised, Fife started to pack up. The people staffing the booths next to them encouraged the two to stay, telling them the inspectors had no right to kick them out of the neighborhood gathering. They also suggested that they give away the lemonade and accept donations instead and one of them made an announcement to the crowd to support the lemonade stand.

That’s when business really picked up — and two inspectors came back, Fife said. Julie started crying, while her mother packed up and others confronted the inspectors. “It was a very big scene,” Fife said.

The inspectors refused to relent. Julie has not spent $120 for a temporary restaurant (?!) permit and so she had to shut down her stand. And why did the inspectors hassle a little girl so much that she broke out into tears? Why, because she was a potential public menace, of course!

Technically, any lemonade stand — even one on your front lawn — must be licensed under state law, said Eric Pippert, the food-borne illness prevention program manager for the state’s public health division…

“When you go to a public event and set up shop, you’re suddenly engaging in commerce,” he said. “The fact that you’re small-scale I don’t think is relevant.”

[Environmental health supervisor for the Multnomah County Health Department Jon] Kawaguchi, who oversees the two county inspectors involved, said they must be fair and consistent in their monitoring, no matter the age of the person. “Our role is to protect the public,” he said.

That’s right, folks, the city of Portland, Oregon was under immediate threat from a 7 year-old girl selling cups of lemonade made from drink packets and bottled water without a permit that would have cost more than she would have taken in that day.

One question the reporter didn’t ask was this: How does it protect the public to force people to pay for a $120 permit? I’m fairly sure these aren’t magic permits which, when waved over your business, provides a safe and sterile environment for your wares. One could argue that the city needed to recoup the cost of having an inspector check out her stand to make sure it was safe, but there’s no way in the world it would have cost the city $120 worth of inspector time and effort to do that. Even if they spent an hour giving her stand the CSI: Portland treatment and another hour filling out the necessary reports, that gets us up to, what, 60 dollars (at a very generous rate of $30/hour)?

I know how little Julie feels. I’ve had my fun ruined by a complete boor who couldn’t, or wouldn’t, think around the rules creatively to make sure everyone got what they wanted. Unfortunately, Julie’s lesson in free markets and regulations was for real. Her joy-killers had real power — the power to ruin her day as casually as they’d eat lunch, all for the sake of a “save the people” slogan that had been drained of real meaning a long time before Julie’s lemonade stand ran afoul of it.

I’m no economist, but I know that a free market does not make a little girl cry. That’s a job for the joyless nannies of the bureaucracy.

(via memeorandum)