Response to Regulation

I recently saw a video on youtube, in which an author blamed the regulations for businesses and especially food service businesses for the failure of many small business ventures.  Although I see his point I do not see any way around this issue.  To have a safe, functioning society, regulations must stay in place.

The video can be found at http://www.youtube.com/watch?v=_gIGpzoZxuA

In this video, “Max Borders on Our Compulsive Urge to Regulate” Max Borders explains his attempt at a failed business venture to sell homemade barbeque sauce at a local farmers’ market.  He attributes his failure to the regulatory standards put in place by local and federal governments.  He states that he needed his kitchen certified by health inspectors and he needed a business license and business insurance.  These startup costs made it impossible for the business to get off the ground.

            His position is that these regulatory practices hurt entrepreneurs and small business.  This argument is pretty substantial, but imagine a country without regulations.  What would happen if meatpacking plants did not have health inspections?  Would every company have the integrity to maintain its facilities without supervision?  Perhaps the country would be revert to the ways of Upton Sinclair’s The Jungle where the meatpacking industry had no inspections and severed fingers were, often, ground with beef to make hamburger meat.  This is an extreme, but it clearly illustrates the need for certain regulations, especially in the food industry.

            As far as the author’s mentioning business licenses and business insurance, this is mainly to protect the business.  If the business comes under some kind of lawsuit, a small business would, likely, not have the capital to pay a settlement.  Therefore, it is imperative for the owner, to avoid complete business and personal ruin, to have business insurance.  This insurance would benefit the consumers of the product, as well, making a more stable society in general.

            Max Borders’s response to the “regulatory state” is to take the government out of business except for the courts.  This is not an acceptable solution.  America must be proactive.  It cannot wait until 5,000 people are affected by a salmonella outbreak.  Regulations set standards to prevent the irreversible from happening in the first place.  This is why the regulatory system must continue.

            Perhaps one solution to help small business would be to graduate the regulatory fees and subsidize the cost of business licenses insurance. This would allow small businesses a chance in a competitive market where it seems that only the most affluent have a fighting chance.  In conclusion, though the regulatory system makes it tough for entrepreneurs and small businesses to thrive, it is necessary to protect the community of consumers and the country in general.