Ultimately, the Problem is the Government

(Don Boudreaux)

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Here’s a letter to the Wall Street Journal:

Gilbert Fleitas counsels Brendan Mulvaney – the seven-year-old whose lemonade stand was shut down by the New York State Health Department – to blame the shutdown, not on government, but on “private-sector lemonade vendors who ‘didn’t like a competitor’ and insisted the Health Department enforce its permitting rules” (Letters, August 9). To hammer his point home, Mr. Fleitas ends with this advice to Brendan:”It’s your private-sector competitors about whom you should be worried.”

Mr. Fleitas is correct that private companies often use government to unjustly shield themselves from competition. He is incorrect, however, to excuse government. Ultimately, it is the government that forcibly closed young Brendan’s stand. Without government, Brendan’s competitors could never have forced him out of business; they could only have made his stand unprofitable by offering better lemonade at lower prices to willing buyers. Yet with government, Brendan’s competitors rid themselves of a rival, not by serving consumers better, but instead by summoning the state to coerce Brendan to stop serving willing buyers.

So I end with this alternative advice to Brendan: It’s the government, which alone has the power to dispense unjust favors to your private-sector competitors, about which you should be worried.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030