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Protectionism Shuts Down "Nathan's" Hot Dogs

Posted By Gavriel Swerling On August 1, 2012 @ 3:30 pm In Economics | Comments Disabled

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In recent years, this country has been plagued with an epidemic of over-achieving teenage entrepreneurs who refuse to waste their youth sitting in their parents’ basements playing video games. These youths are entering the marketplace in droves to peddle hot dogs and lemonade without any thought to what that kind of competition might do to established local restaurants.

Thankfully, local governments have begun standing up to these young troublemakers and have finally started enacting protectionist ordinances to rein in the entrepreneurial spirits and financial responsibility of these rebels.

Take 13-year old Nathan Dusynski [2], for example. He had the audacity to try to break into the hot dog industry in Holland, Michigan, to earn some money for family bills (his mother suffers from epilepsy and his stepfather has multiple sclerosis) and to start saving for a car and college. He petitioned city hall officials to make sure that his business enterprise was legal, he meticulously researched the issue, he acquired the necessary permits for the spot where he wanted to operate, and he bought a hot dog stand with the $1,200 he had saved from mowing lawns, shoveling snow, and performing other odd jobs.

Within an hour after he set up shop on commercially zoned private property owned by a family friend, however, city officials revoked his permit, effectively shutting down Nathan’s new enterprise. The reason was that his hot dog stand violated an ordinance providing that non-restaurant associated food vendors could not operate in the downtown commercial district. The city manager justified the ordinance as a measure to protect the already existing downtown restaurants from outside competition from street vendors.

Across the country, local governments have installed protectionist ordinances like this one with similar results. For example, in Midway, Georgia, and Appleton, Wisconsin, police shuttered lemonade stands run by children in violation of local ordinances enacted to shield preexisting businesses from such fierce competition.

To be frank, any sit-down restaurant that cannot handle competition from a hot dog stand run by a 13-year-old needs to re-evaluate the quality of its meals—if it should be in business at all—and should not be sheltered from free market competition, especially not by food stands owned and operated by children.

Zoning practices are commonplace in almost every city and municipality in the United States. The laws are used for a variety of safety, public health, and aesthetic reasons. To use these ordinances to stifle competition and economic growth, however, is to dampen valuable competition—a policy that represents an unjustified governmental infringement on free markets.

In Nathan’s case, the regulations also stiff-arm children and teenagers who have taken the initiative to start working toward financial independence. That initiative is always welcome, but it is particularly valuable today, when many young adults are taking longer and longer to move out of their parents’ homes and become independent.

Thankfully, Nathan was able to sell his hot dog stand for a profit, but he is still without a job and an income. Young people like Nathan should be applauded for their hard work and sense of accountability, not tied up in protectionist ordinances that violate the capitalist principles on which the U.S. was founded.

Gavriel Swerling is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, please visit http://www.heritage.org/about/departments/ylp.cfm [3].


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URL to article: http://blog.heritage.org/2012/08/01/protectionism-shuts-down-nathans-hot-dogs/

URLs in this post:

[1] Image: http://blog.heritage.org/wp-content/uploads/hotdog1.jpg

[2] Nathan Dusynski: http://www.mlive.com/business/west-michigan/index.ssf/2012/07/how_hard_is_it_to_sell_a_hot_d.html

[3] http://www.heritage.org/about/departments/ylp.cfm: http://www.heritage.org/about/departments/ylp.cfm

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