January 31 2014
Patrice J. Lee
Spanx, Harry Potter, and the Huffington Post. All three are successful enterprises that started with one person – one woman- and were turned into billion dollar enterprises. The free market provides individuals with the opportunity to pursue their passions, leverage their skills, and generate value for society. How many curves have been tamed by shapewear and how many kids discovered a love for reading from a little boy with glasses and a wand?
Entrepreneurship is the driver behind the American Dream. It’s alive in Silicon Valley startups as much as in garages and kitchens across America.
But what happens when the next potential Betty Crocker directs the same creativity and passion to sell cupcakes? Government steps in and shuts her down.
An eleven-year-old cupcake baker had her business closed by local officials for failing to have a permit to sell her sweet treats. This is a heart-breaking demonstration of how burdensome regulations harm entrepreneurs and small business.
Here’s the story:
When people started noticing young Chloe Stirling’s cake decorating skills, they started requesting she bake them orders for birthdays and holidays. Her clever designs quickly turned into a childhood business venture, as her eager customers gave her money in exchange for birthday cakes and baked goods.
The Madison County Health Department demanded that the girl stop selling cupcakes or face legal consequences. Chloe had to cancel a number of orders and was left broken-hearted.
In order to sell cupcakes, another kitchen must be constructed in her family’s home, she must pay fees, and follow a number of arbitrary regulations. Or, she could acquire an expensive storefront, and be burdened with the costs of renting commercial property, buying equipment, and of course paying taxes and other assorted fees.
She must obtain a permit from the government and allow inspectors to monitor her operation in order to avoid the wrath of county food controllers and abide by the Illinois State Food Sanitation Code.
“A rule is a rule,” squawked spokeswoman Amy Yeager to KMOV.
Food and business regulators often posit their efforts as means to protect the safety of citizens and customers. They set growing taxes, fees, rules, and requirements to ensure that the meals we dine on won’t make us sick, the medicines we take won’t poison us, and the buildings we live in won’t fall apart from shoddy construction. Some are commendable and important to the functioning of society.
But what happens when government goes overboard? It stifles innovation, deters risk-taking, and discourages new ventures. What’s often at work as the article highlights is cronyism. Once established businesses will lobby government officials to secure rules that are meant to lock out new competition. It’s pitting big business against new business.
Whatever the motivations behind the regulations that stifle –and in this case- snuff out small business like Chloe’s cupcake business, we need to take a long hard look at just how we treat entrepreneurship.
Small businesses employ over half of the jobs in the private sector and created nearly two out of three new jobs over the past decade. The Chloe’s of the world should be encouraged by government in her ventures rather than blocked by unnecessary regulations. Perhaps our national economy wouldn’t be sputtering along if our leaders relaxed the rules that stifle small business.
Rules aren’t meant to be broken. But they should be revisited from time to time to ensure that they are achieving intended results without committing greater harm along the way.