Maybe We Need to Redefine What A Small Business Is

On CBS Sunday Morning, they had a segment about three women in Wisconsin that are challenging Big Food.  They are challenging the Wisconsin law that prohibits the sale of home baked goods.  The Republican Speaker of the House won’t bring the bill to the floor.  CBS alluded that it’s because he owns a popcorn company and is in the pocket of the Big Grocery store chains.

I doubt that is the issue.

The real issue is something my wife mentioned.  He doesn’t want the Republican elected representatives to be forced to even vote on it.  Wisconsin is a rural state and the sharing economy can benefit it.

It’s not just Republicans that are on the side of Big Food.  Democrats are too.  The food lobby is the most powerful lobby in any legislature.  It’s dominated by politicians from both sides of the aisle.   Watch the vitriol spew from both pulpits when a subsidy is threatened.

The internet has changed the game.   Check out this blog post on Adam Poots who has built a business off Kickstarter.  Plenty of people built businesses off Ebay, Amazon, and Etsy.  I know of people building nice cash flow businesses off Dabble.  Companies like AirBnb, Uber, Lyft and Task Rabbit allow people to monetize assets that wouldn’t traditionally be monetized.  Blockchain has the potential to create even more economies like this.  Artificial Intelligence and the rise of robots are going to create new ways for people to monetize and the incentive to do it if they have their job disrupted.  The genie isn’t going back in the bottle.

Regulation is far behind.  It will always lag.

I think these kinds of businesses are places where everyone can find common ground.  Inside states, permitting is a huge problem. In many states, it takes more hours of education and permitting to be a barber versus being an EMT.  The state of Illinois is working on it and will present their findings this week.  Illinois is one of the most heavily regulated states in the United States.  The Chicago Democratic Machine and The State’s Combine love bureaucracy. If you want to find some reading on it, check out  The Goldwater Institute and the Mercatus Center.  They consistently advocate for free enterprise and free market policy.

Food is one place where we can find common ground.  Letting entrepreneurs innovate around food will create jobs.  It could be great for consumers too as choices expand.  Food regulation in the US slants heavily to big factory producers.  Small and independent producers cannot cover the costs so they can’t start businesses.  Regulations extend into actual farming and animal practices and alter practices.  The United States could see an entrepreneurial boom with lots of innovative product choices if we had lighter regulatory practices.

What’s the hold-up?  Big Food says it’s unsafe.  Unions also are on the side of Big Food.  They use fear as a weapon to keep their influence.  Unions want the jobs.  In a small sample of cases, they might be right.  But, most of the time when people get sick eating it’s from big factory farmed and big factory produced foods.  Listeria on cantaloupe?  Listeria in pasteurized ice cream?  Ecoli in processed meat.  Ecoli in flour!  Small producers cannot afford to have that happen because it would totally destroy their business for good.   The internet is such a good truth detector and roots out fraud, the risk is far less than the potential reward.  What’s really unsafe is Big Food’s bottom line.

It seems to me that until the early 1900’s, the US did pretty well with less food regulation.  It was really Upton Sinclair’s book The Jungle which brought about a lot of regulation.  His book was really a well-disguised pamphlet to advocate for the unionization of the workforce.

I don’t see where a legion of small highly fragmented independent producers will harm Frito Lay.  Instead, I see the small fragmented independent producers filling teeny market niches.  They will expand the market.  Look at coffee shops.  Starbucks success created more independent coffee shops and more coffee chains, not less. That success turned some homes into mini-coffee bars, which created even more demand.

Like me, maybe you read countless articles after the election about basic income, the loss of jobs, and lack of economic growth, especially in the Rust Belt.  Those same articles said that coal mining and manufacturing jobs were never returning and we have all lost hope.  They chastised the intellect of the populations there because of how they voted, and how they felt.  Well, maybe it’s time to deregulate and give people a different opportunity.