Originally published in the Front Range Voluntaryist, Issue #7, September 2017
By Nick Weber
Amid our never-questioned culture of endless regulation and law-making a simple, yet crucial, socio-economic concept is highlighted by recent pet-sitting legislation: should you stop lawful plunder or participate in it?
Stories of government overreach abound: kids brought to tears because they had the gall to set up a lemonade stand without a permit, un-permitted book exchange boxes taken down due to zoning violations, greedy neighborhood kids fined for mowing yards without business licenses, and more recently, a man arrested in California for selling vegetables on the street corner. Bizarre as these stories are, they have and will continue to occur, always framed under the guise of public safety. It’s bad enough when the government comes knocking at your door for violating some obscure regulation or sends you a violation notice in the mail because you are lacking the requisite occupational license to “legally” operate your business; but what could be worse than the heavy hand of government working it’s way into your everyday business life? The answer: when the full weight of the government is thrown at you at the behest of your competition. As economist Henry Hazlitt put it:
“The envious are more likely to be mollified by seeing others deprived of some advantage than by gaining it for themselves. It is not what they lack that chiefly troubles them, but what others have.”
Perhaps that is a bit too harsh. As we shall see, this will come full circle and the blame can be squarely placed right back at the hands of our benevolent government.
Earlier this year in Colorado, a large boarding/kennel company complained to local officials about one person, who was using a mobile dog watching app to provide a specific service for dogs with anxiety issues and was certainly cutting into the large kennel’s bottom line by offering a better service than they were able to provide. The local officials indicated that the individual was breaking the law for operating a large kennel without a permit. State legislators were quick to “rectify” the situation with House Bill 17-1228, signed into law on June 5, 2017. The bill would “change current law that requires anyone who boards another person’s pet for money to be licensed. It would “allow” online platforms like Rover.com and DoggyVacay that link pet owners to potential pet watchers to operate and would limit such contract sitters to no more than three pets at a time.” How or why three became the number is a mystery, but I’m sure it is for the good of the people.
At this point it is important to stop and ponder for a moment in grand terms regarding what happens when government intervenes in a market. Economist Frédéric Bastiat cogently summarized that:
“the real cost of the State is the prosperity we do not see, the jobs that don’t exist, the technologies to which we do not have access, [and] the businesses that do not come into existence…”
Rather than allowing the market to adjust itself in response to individuals stepping forward and offering valuable services, regulators simply stifled innovation at the behest of a large company who has been enjoying an undue advantage via occupational licensing. This is an example of government creating barriers to entry that ultimately favor one business over another. When the licensing requirements are unnecessarily burdensome, some businesses just simply exit the market, their services lost along with the associated technologies that would undoubtedly be a benefit for the consumer. To further explore the concepts of government intervening in markets and businesses turning to government to squash potential competitors, I recommend the article Bastiat, A Fine Political Economist, by Mike Morris, published in the Front Range Voluntarist, July 2017.
But now, let’s tackle a more focused question: why does a dog kennel need to be licensed in the first place? Without a doubt, if you are a dog lover, you are going to do your due diligence and make sure that the kennel or individual is a reputable and trustworthy entity that will offer the best care for your Fido before you send him off to boarding for a week. Does that State issued piece of paper hanging in the lobby really give you the confidence that nothing bad will ever happen at this facility? Do we really need to do the research to find what would surely be countless instances of State licensed facilities treating dogs inhumanely? If a private business wants to voluntarily obtain an independent certification, that should be their decision and could very well land them new and continued business. We must consider, however, that even with an independent certification in place, bad things could happen. One thing we know for certain is that no amount of legislation will eradicate the world of all evil, that’s a fool’s errand.
Often times this type of legislation is framed as such: “Colorado lawmakers moved to allow online pet-sitting platforms to operate legally in this state despite concerns from kennel operators that doing so could endanger pets or put existing facilities out of business.” Gasp! There it is, right at the end of the lead sentence in the article: the government moved to allow some business to occur, but my oh my, what will happen to the existing businesses that have enjoyed government protection via licensing requirements all this time? This could put companies out of business! I’m reminded of a recent situation in Colorado where similar phrasing is being pushed regarding legislation that allows grocery stores to sell full strength beer: how can we implement allowing full strength beer sales since it will put all the mom and pop liquor stores out of business? If that is confusing to you, you are not alone. In Colorado, grocery stores were not allowed to sell full strength beer but in last year’s election cycle, the people voted to overturn that prohibition. Now the state and local governments are scrambling to figure out an equitable way to phase in the legislation (which takes effect in 2019) without destroying the small liquor stores that are located right next to the grocery stores. Surely, some small businesses will go under and it will be painful, but it is most certainly a problem that government created with it’s prohibition on grocery store full strength beer sales in the first place. Not to mention that ultimately, the consumer loses through decreased choices in beer selection and the loss of the immediate feedback loop that exists with small local liquor store owners and their relationships with distributors and brewers…but I digress. Both the dog-sitting legislation and the prohibition on grocery store full strength beer sales have one thing in common, they represent nothing more than market distortions that are in need of painful, but necessary, resetting.
What we also see evidenced here is what Bastiat identified as a common belief that:
“anything lawful is also legitimate…” and that “many persons have erroneously held that things are “just” because the law makes them so.”
There is a belief in laws that is ingrained into our culture from day one: the state is here to help you and will legislate all the bad things away. Our collective cognitive dissonance allows us to ignore the reality of our over-burdened regulatory State, for we continually allow for its expansion via licensing, permits and fees within the business realm with nary a complaint. The secret to achieving this task is for the State to split up and separate out all the multifarious fees, licenses and permits that, if considered all-in, would undoubtedly be roundly rebuked by the masses. It’s also helpful to not refer to these items as taxes, but what is a fee if not a tax? We fail to realize that the state will stop at nothing with continual regulatory expansion and the obligatory bureaucratic staffing associated with the implementation of these items; for how do you keep all those violators in line? This is another hidden aspect of the regulatory State. Since government does not create income itself, it must steal the funding for myriad staffing positions of un-elected bureaucrats via additional taxes. This has happened before and is inevitable with government, which always seeks to expand and control. This was plainly evident to the founding generation, to wit: one of the grievances levied at King George III was that “He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people, and eat out their substance.” The terrifying reality of that grievance specific to the items discussed in this article, is that it is not some King in a far away land, but our competitors, our neighbors, that bear the responsibility for expanding this type of lawful plunder. I would be remiss to fail to mention Bastiat’s disdain for founding father worship, for he stated that:
“the world has far too many “great men,” “fathers of their countries,” etc., who in reality are usually nothing but petty tyrants with a sick and compulsive desire to rule over others. The defenders of the free society should have a healthy disrespect for all such men.”
That being said the grievance itself, holds true, irrespective of any ulterior motives of the founding generation.
Most will see this new dog-sitting legislation as a “win,” look-see: the government stepped in to allow a new technological sharing economy to develop within the context of already existing business licensing requirements! We need to re-frame the conversation and focus on the reality of the regulatory State, which has created an unbalanced market, pitting one business against another on the grounds of regulation violations. Without a doubt, the over-bearing licensing requirements in the first place most certainly created the problem that “needed to be solved.” Oh look! Silly Fido is chasing his tail again!
