Iain Murray

This piece was co-authored by Ryan Young

America is a country founded on entrepreneurship and free enterprise. That’s why one of its most enduring childhood traditions is the lemonade stand. It teaches children initiative, about the value of money and how to earn it. Recently, however, children have been learning entirely different lessons—that bureaucrats are in charge and you cross them at your peril.

Bureaucrats have the power to pick winners and losers—a power many are happy to exploit. Lydia Coenen of Appleton, Wisconsin, recently learned about this dark side of competition. Appleton hosts an Old Car Show every year near her house. She and a neighbor have been selling lemonade and cookies to passersby for the last six years. This year, they were shut down by police. Vendors inside the car show didn’t appreciate the competition, so they convinced the city council to ban concession sales within a certain radius of the Old Car Show, putting young Lydia and her friend out of business.

Four-year-old Abigail Krutsinger of Coralville, Iowa, learned about how health and safety regulations affect small businesses. Cyclists participating in a bicycle race from one end of Iowa to the other, known as the RAGBRAI, stopped in Coralville. Abigail set up a lemonade stand to sell to the thirsty, exhausted bikers. Police shut her down, too, along with two other nearby lemonade stands. It turns out that children’s lemonade stands are illegal in Coralville unless the kids apply for a vendor’s permit and submit to a health inspection—for a homemade product.

Montgomery County, Maryland, fined the parents of one group young entrepreneurs $500 for selling bottled drinks from a cooler outside the U.S. Open, which is held near their homes. They were raising money to fight pediatric cancer. After the predictable wave of bad publicity, the county’s director of permitting waived the fine and the children were allowed to reopen—100 feet away from any major foot traffic.

And that’s just this year. Children all over the country have faced regulators’ wrath in recent years, from California to Florida to Minnesota.

The lemonade stand crackdown illustrates a central law of bureaucracy: Regulation is unthinking and uncaring, allowing for no exceptions. There is no better illustration of this than the words of one public health official responding to a parent interested in having his child run a stand: “What the Lemonade Day organizers should teach the children…is about the importance of learning and obeying the government regulations that prohibit lemonade stands.”

That’s why Robert Fernandes, a father of two, founded Lemonade Freedom Day. On Saturday, August 20, Fernandes wants children and their parents across the country to set up lemonade stands in their neighborhoods—without applying for permits, undergoing inspections, or paying any fees.

If a child wants to learn a little something about running a business, he or she should be able to do it without being pestered, harassed, bothered, disturbed, perturbed, nettled, exasperated, stifled, fined, or regulated.

The rest of us can also learn a lesson. Unthinking, uncaring bureaucracy kills entrepreneurship, businesses, and jobs. If you can’t even set up a lemonade stand for an afternoon without paying tribute to your local bureaucratic overlords (and thereby help keep them in their highly paid jobs), then what hope is there for the start-up or small business owner hoping to expand?

Genuine deregulation is our best hope to kick-start the economy. As we like to say at CEI, you don’t have to teach the grass to grow; you just need to take the rocks off of it. In that spirit, it’s time to get the cops and bureaucrats off the backs of entrepreneurs who are still in elementary school.


Iain Murray

Iain Murray is Vice President for Strategy at the Competitive Enterprise Institute. His most recent book is Stealing You Blind: How Government Fatcats Are Getting Rich Off of You