What do you do when life hands you lemons? If youre about to say make lemonade, make sure you have a permit first or you might get an unwelcome visit from a government official. This Saturday is Lemonade Freedom Day, which is a protest against governments shutting downwait for itkids lemonade stands.
Youve probably seen the stories about governments shutting down kids lemonade stands. If not, here are results just from Forbes.com alone. Im certainly not the first person to write about this: E.D. Kain, for example, has weighed in on lemonade stands a couple of times (1, 2) and directs readers to a similar case in which Salem, Oregon officials have gone after a woman who is having yard sales to pay for bone cancer treatment.
On reading about cases like this Im sure a lot of people are asking whether the world is going mad or pointing out, as Iain Murray and Ryan Young do, that the message the lemonade crackdowns are sending to the young is that our first and most important task is to obey regulations. While it isnt as if governments are waging articulated wars on lemonade stands, as a matter of principle this is worth thinking about.
Intervention turns everyone into an interventionist. Little Lucy Lemonade competes with firms that have jumped through a bunch of regulatory hoops. Exempting her from these requirements puts formal, registered, and regulated firms at a competitive disadvantage. The regulated incumbents develop Stockholm syndrome and start defending the regulators who are making their lives hard, or at least demanding that the regulators go after potential competitors (heres a clever cartoon that inspired me on this, and the original cartoon that inspired it).
Art Carden is a Research Fellow at the Independent Institute in Oakland, California and an Associate Professor of Economics at Samford Universitys Brock School of Business.