Every day, federal, state and local governments stifle small businesses to privilege well-connected incumbent companies. It's a system of protectionism for influential insiders who don't want competition. Every locality has its share of business moguls who are cozy with politicians. Together, they use the power of government to keep competition down and prices high.
The Institute for Justice, a libertarian public-interest law firm, works to free entrepreneurs from such opportunity-killing regulations. Here are four cases from IJ's files.
Case No. 1. The monks at St. Joseph Abbey had to take the state of Louisiana to federal court to defend their right to make money selling handmade caskets. That's right: empty wooden boxes. But as soon as the monks started selling them, they were shocked to receive a cease-and-desist order from something called the Louisiana State Board of Funeral Directors. The funeral directors had managed to get their state to pass a law decreeing that only "licensed funeral directors" may sell "funeral merchandise" like caskets. To sell caskets legally, the monks would have to obtain a funeral director's license. That required a year-long apprenticeship, passing a funeral industry test and converting their monastery into a "funeral establishment" by installing embalming equipment, among other things.
The state board and the Louisiana Funeral Directors Association -- the profession's lobbyist -- say the law is designed to protect consumers. But that's what established businesses always say about absurd regulations they demand. An unusually candid funeral director told The Wall Street Journal, "They're cutting into our profit." Well, yes, free competition does do that. That's the point.
Another funeral director said that the law must remain unchanged because casket-making is a complicated business: "A quarter of America is oversized. I don't even know if the monks know how to make an oversized casket." Does that even deserve a comment?
Case No. 2. Hector Ricketts wants to offer New York City residents an alternative to New York's slow and clumsy public transportation. He employs drivers who offer commuters rides in minivans. The vans serve mostly low-income neighborhoods and typically charge $2 a head. People like the vans. They're more convenient than unionized government-run public transit -- and cheaper, too. The subways and buses charge $2.25.
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