The government and lemonade stands -- a myth deconstructed
January 18, 2013
One of the common laments I've heard from those who bemoan "big government" and "overregulation" is the story of government crackdowns on kids' lemonade stands.
But what if these laments are exactly wrong -- what if lemonade stands actually pose a threat to our future way of life?
Let's look at at least the stereotypical kid's lemonade stand. Obviously, not all experiences are the same -- but the stereotype, and not without some good reason, is that of the kid who wants to earn a little extra money, and gets some lemonade mix, a pitcher, and cups from mom as well as an old card table from the garage and starts spruiking lemonade from the front yard or neighborhood corner.
In this case, at least, what are we teaching this kid?
First, we are teaching the kid about government subsidies. If the kid gets all the raw materials for free from his parents, his business is being fully subsidized with no outlay of his own. There's no downside.
Second, we are teaching the kid little or nothing about competitiveness -- it's not like the kid's product is being purchased because of superior quality or price point (anyone could get the same lemonade by buying a canister of lemonade mix at the local grocery themselves). Sales are happening basically as a disguised form of charity, people who stop and buy lemonade because they find it charming to "buy" something from a kid.
Third, we are teaching the kid that rules don't generally apply to him. Real businesses actually do have to abide by some rules to set up business and operate safely, but since this is a kid, he doesn't have to do any of that. Furthermore, if anything were to go wrong, who's going to get the blame (or the lawsuit)? Not the kid -- the parent.
Ultimately, what we are teaching a kid with the stereotypical lemonade stand is *entitlement*. We teach him that he shouldn't have to take any risk of his own, that he is entitled to profit regardless of the quality of pricing of his goods, and that he should be able to do so freely without any restriction or consideration of others -- and that if anything goes wrong, he'll be bailed out of the trouble.
Obviously, this is a discussion derived from a particular stereotype of a kid's lemonade stand -- but let's face it, these are the qualities that sound exactly like those of the worst stereotype of a Wall Street banker who feels entitled to massive profit regardless of effort or consequences to others.
Maybe, just maybe, there might actually be a point to having the government crack down on kids' lemonade stands.