Vindicated! How Ron Paul's Life Proves My Point

No later than two days--TWO DAYS--after I posted my last blog, which is the latest in my Libertarian Views of Law series, I came along a passage in End the FED that proves my point about the unnecessariness of regulation in starting and running a business:

"My first job, and that of my brothers, was to assist my dad in a small dairy run out of our basement. Even at the age of five, the incentive system was instilled in me. Our job was to make sure all the glass bottles, which had been hand washed, were clean. It was bad for business if a customer saw a black spot in the bottom of a milk bottle. For each dirty bottle we found as we removed them from the conveyor belt and placed them into the wooden case, we were rewarded a penny. It didn't take long for us to know when a certain uncle was washing the bottles, since more dirty bottles were found on those days." End the Fed, Chapter 4 "My Intellectual Influences", p.33-34

Paul's anecdote touches on topics that I didn't think about at the time, and it agrees with various points I made in my Suzy Q argument. "It was bad for business if a customer saw a black spot" touches on the idea that cleanliness is necessary to expect transactions to occur. Dirtiness, in contrast, is repugnant to many customers and is an instant transaction-stopper! In fact, no transaction would come into existence in the first place.

Notice that this idea is also an extension, or better yet application, of the Golden Rule. Doing unto others in this case would be preparing a clean home (as in the Suzy Q story) or having spotless milk bottles. Who would really think they can sell milk with grime on the sides, spots in the inside, and cracks near the lid?

Also noteworthy is the fact that this business was run out of their basement. There is a surprising connection between Suzy Q's hairstyling business run out of her home and the Paul family's business run out their home. It is bootstrap capitalism: "a person or group of persons collaborated and started a business and within years it was successful."

The current laws under the U.S. Fair Labor Act actually allows "work in businesses owned by their parents (except in mining, manufacturing or hazardous jobs)", so the young Ron Paul and our young Suzy Q would not be in jeopardy of losing their right to earn a living. But many other kids are in jeopardy of, if not prohibited from, losing their right to earn a living. The current law "sets 14 as the minimum age for most non-agricultural work."

This also prompts me to admit that my title "Why You Can't Legally Braid Your Neighbor's Hair" is slightly a misnomer, slightly. A mother can braid her child's hair; a child can braid her friend's hair; but operate a Hair Salon out of your home? Oh, you can't do that. That would be against the law!

Still, what if the only "non-agricultural work" is the only work in town? Should kids under 14 have to be deprived of their right to work? Furthermore, what if they aren't skilled at agricultural work, but very skilled at "non-agricultural work" should they be denied the right to make money doing what they are skilled at? And how can they learn?

Paul touches on something that I was aware of but failed to illustrate: working at age five gave him incentive; and I'd add that working young gives a sense of dignity as well. How can kids get work experience needed for greater, more skill-specific jobs, if they can't even get experience in less specialized jobs? They are legally barred from doing so.

The funny thing is that I was just conjecturing about the libertarian/biblical application of ethics when I wrote the previous post. I never actually had any real examples. In fact, I didn't even read the laws (until today). Then I came across the passage in "End the Fed", and I jumped (not literally) when I saw it.

From these last few Libertarian Views of Law posts, the observant reader will be able to make valid inferences about the law, and the humorous paternalism guiding them all: the grocery store laws, the agricultural laws, and every other law enforced by the State.

Libertarian Views of the Law: A response to the Hair Post

The Right to Earn A Living, by Timothy Sandefur, Released September 2010

This is a response to a comment on September 16th's Libertarian Views of Law, "Why You Can't Legally Braid Your Neighbor's Hair"

Someone left the following comment:

I would take a middle of the road approach.
The above example was definitely an example of "over regulation". That being said, I am not in favor of no regulation.

In this case, I believe that if the business was
a) conducted in a safe and sanitary manner
b) incorporated or otherwise legally formed in that jurisdiction
c) workers were legal citizens being paid employed legally and paid legally

That where the regulation should stop.
Technique, style, etc. do not need to be regulated.

What this person didn't say was whether businesses that don't comply with these regulations should be allowed to come into existence or not. I will assume they meant to disallow the business to come into existence without compliance to these regulations. Let me offer this scenario and show why the business owner's best interests will lend to self-regulation of the business:

The Story of Little Suzy Que

Little Suzy Que was down on her luck. One day, she decided she wanted to earn a living doing her friends hair. She was only in the 7th grade when she wanted to get started on her new hairstyling endeavors.

It is day one and she anticipates her first customer.

The first customer arrives at Suzy's home mid-afternoon. Suzy, being the great customer service provider she is, and wanting her customer to return for more business, greets her.

Lana, the first customer, looks around Suzy's home. It is clean, sanitary, and even has the smell of incense in the air. Suzy knew that Lana is a picky person and an uber-germophobe, so she kept the place clean in preparation for Lana. If she didn't Lana wouldn't have entered Suzy's home and Suzy would have lost a sale. Suzy's best interests to gain customers kept her workplace tidy and organized; and kept business conducted in a safe and sanitary manner.

The Moral of the Story

Because Suzy wanted customers, she had to have the type of place that attracted customers. She couldn't have a hell-hole for a salon.

This not only applies to hair salons, it applies to the food industry as well.

For instance, let's imagine how McDonald's would have had to have act in its earlier stages to develop its initial customer base. Well, since it was a new restaurant, it had to be clean. It couldn't not be clean--say have roaches and mice scurrying around--because that would be unattractive to customers (who are quite the clean freaks); they would lose sales every time from someone who would otherwise eat there if it were clean. In order to retain customers, Mickey D's had to be clean and it had to serve good food (in other words, food that people want).

A possible objection could be that customers can see the immediate dining area, but they can't see behind the counter, including all those areas where the food is being made. Well, once again, I think, the problem is solved by the manager's, workers', and cooks' self-interest.

If the place is unsanitary, workers may be fired for not following their own-internal regulations and keeping their stations clean and managers would lose business if people are sick. (If customers do become sick because of the food, then I would not discourage a lawsuit.) The ultimate price to pay for their unscrupulousness is business failure.

Another possible objection could be "what if they don't have any internal regulations?" Well, then surely a lawless business would not last long. It would possibly put itself out of business from all the nausea-heartburn-indigestion-upset-stomach-diarrhea-having-Pepto-Bismol-needing customers filing lawsuits.

The next objection I can think of, at this point, is that there needs to be a regulation pressing for them to prevent these people from becoming sick somehow, which is just a rehashing of both a) and b) above. All I can say to that is, what if the company is allowed to come into existence and one uneventful day they accidentally get someone sick? The company can investigate the causes and change their behavior (which would be pressing since things like this are easily leaked to local media outlets within hours). (In light of this, how would someone prevent a business from coming into existence anyway? Cooking tests? Licenses? The licenses question is answered by the word-of-mouth / competency answer that was whole point of the original hair post. We have made a complete circle.)

All of this is to say that people operating within their best interests are inclined to provide good quality services. No regulator needs to tell them that if they are serving out of a hell hole they need to fix the place up. No self-respecting customer would go there. If they go there, then they aren't really all that self-respecting.

"But shouldn't we protect people from their own stupidity if they decide to eat there?" Well, not exactly. We deprive them of the experience to learn from their mistakes - they aren't learning to be scrupulous, aware citizens when we prevent them from shopping at a certain establishment.

Conclusion

There a plenty of things that people do without licenses that can be done for money. If a college student wants to cut hair, or braid hair, or cook food, to maintain himself or herself during his or her college years, shouldn't he or she be able to do so? (To push this logic to the extreme, would we suggest putting hair salons out of business just because we decide to allow mothers to style their daughter's hair? Or would we not allow people to cook for their families if they didn't have a license?)

People who want licenses for everything really don't want to put people out of work, they just want confidence that a person can effectively do the work they were hired to do. But don't block a job from coming into existence simply because they don't have a license.

Find out how in the tentatively-titled (and yet to be published) "The Heart of the Matter: Why You Have a Problem with Human Nature (and not with Capitalism).

Libertarian Views of Law: Why You Can't Legally Braid Your Neighbor's Hair

The Curious Case of Taalib-Din Abdul Uqdah v. District of Columbia

This week I decided to examine a case dealing with overregulation of the hair braiding industry in Washington, DC. The plaintiff, Taalib-Din Abdul Uqdah, and his wife Pamela Ferrell, owned and operated Cornrows & Co. This business was dedicated to braiding hair and creating hairstyles that traced back to African roots (no pun intended).

The business comprised of workers who were without cosmetology licenses and also of low economic class.

However, the workers were able to receive training to do complex African hairstyles without the financial burden of going to a cosmetology school that they may not have been able to afford—the Uqdah's trained their employees themselves. As Institute for Justice’s website states, this business was an excellent example of “bootstrap capitalism.” That is, a person or group of persons collaborated and started a business and within years it was successful. In fact, it was so successful that it generated over $10,000 in taxes.

However, the Board of Cosmetology of the District of Columbia sought to impose an antiquated 1938 regulation on the business, which would have stifled business, if not closed it completely.

The regulations imposed are also the antithesis of African hairstyling, as the workers would have had to take an examination on hairstyles that are irrelevant to the job and have been out of style for more than 40 years.

The regulations would have also have proved to be expensive, as they would also have to attend a certified cosmetology school for thousands of dollars. Even if all the employees could afford to attend the schools, the time the business didn’t have the employees working could have effectively shut it down due to the lack of revenues—or at least taken a hit in the wallet.

In December of 1992, the DC City Council repealed the cosmetology regulations.

This case was an example of regulations that has the potential to inadvertently (or maybe advertently) destroy employment, destroy low-cost training opportunities for low-skilled individuals, and kill business. The requirement to have the hair salon licensed, the training program licensed, and its braiders licensed would have proven costly as well as wasteful. In fact, they would have been required to take a practical (hands-on) and written test on things such as chemicals (which aren’t even used by African hairstylists).

In a subtle way it reminds me of the United States, et al. v City of New York case where potential firefighters had to take an examination that tested skills unrelated to the profession. These skills were lacked by many of the Latino and Black applicants, but not by the whites, thus the non-whites' failure to pass the test perpetuated the racial imbalances in the profession. In a similar way, the majority of the hairstyling profession would be comprised of stylists who only knew about styles acknowledged at one time in history, who prefer one type of look, worn mostly by one racial group, rather than those with more modern hair styling techniques, if the regulators got their way.