Starting your own business isn’t for the faint of heart — you have to arrange financing, hire staff, advertise, and a thousand other complicated details. So imagine putting in all that hard work, only to learn that the government won’t let you open your doors unless you first get permission from all your existing competitors.
Bizarre as it might seem, that’s just the law that St. Louis entrepreneur Michael Munie ran into when he asked the state’s Department of Transportation for a permit to operate a statewide moving company. Under a seventy-year old law, MoDOT cannot issue a permit without first notifying the existing moving companies and giving them the chance to object. When they object — and of course, they always do — any entrepreneur who wants to start a new moving company must go to a hearing and prove to a group of bureaucrats that there’s a “public need” for a new moving company.
[D]emocracy must be limited by legal protections for individual rights.
How does one prove such a thing? Nobody knows — even if potential customers would be willing to take time out of their day to testify at a downtown hearing about their need for moving services, the law includes no standards or rules of evidence. And in the broader picture, it isn’t really possible to “prove” that customers would like to see any new business. In the early 1990s, nobody could have proven that America “needed” a new chain of coffee shops, but Starbucks turned out to be wildly successful because people really did want one. The only way to “prove” it was to give it a chance.
Yet Michael Munie doesn’t enjoy the same opportunity. In 2009, four established moving companies filed objections to his license application, all arguing that a new moving business would “permit substantial diversion of traffic” from their own companies — meaning, of course, that if customers are given the choice, they’d prefer to hire Munie instead of them. Normally, that’s called “competition,” and it’s good because it means economic opportunity, lower prices, and more plentiful goods and services.
But in Missouri, moving companies that can’t compete fairly can use the government block entrepreneurs from competing — and from pursuing their dreams of running their own businesses. As a result, Munie had to scale back his operation, promising only to operate within a certain section of St. Louis.
Represented by attorneys at the Pacific Legal Foundation, Munie filed a civil rights lawsuit in the St. Louis federal courthouse, arguing that the Fourteenth Amendment to the Constitution bars states from granting arbitrary preferences to established businesses at the expense of entrepreneurs.
That Amendment, ratified in 1868, was intended to protect the essential rights of all Americans against the oppressive acts of state governments. One of its chief authors, Congressman John Bingham, explained that it would protect the right “to work in an honest calling and contribute by your toil in some sort to the support of yourself, to the support of your fellow men, and to be secure in the enjoyment of the fruits of your toil.” Sadly, courts have often ignored the importance of this right. Thanks to a series of decisions issued in the 1930s, courts have often ignored constitutional protections for economic freedom, and allowed lawmakers almost unlimited power to restrict the freedom of entrepreneurs. Liberal Supreme Court Justice William Douglas once called economic liberty “the most precious freedom that man possesses.” But today, licensing laws restrict the rights of countless potential entrepreneurs across the nation. Louisiana requires florists to be licensed. California requires licenses for landscape architects. In Florida it’s illegal to be an interior designer — to recommend where people hang their drapes — without first getting a state license, and getting a license requires years of education at the price of tens of thousands of dollars.
In all these cases, government lawyers have argued that bureaucrats need broad power to regulate the economy to protect the general public, and that courts shouldn’t interfere with the legislature’s “democratic” decisions. But democracy must be limited by legal protections for individual rights. That’s the whole reason we have a Constitution. We would never allow lawmakers to take away our freedom of religion, or freedom of speech, in the name of “democracy.” For the same reason, lawmakers should not enjoy free rein to deprive businessmen like Michael Munie of their economic freedom.
Government exists to protect the public from fraud or from threats to public safety. But the “competitor’s veto” created by Missouri’s licensing law doesn’t protect the public. It only protects private interests — politically well-connected businesses — against fair competition from newcomers.
Missourians deserve better. Consumers deserve greater freedom of choice, and the state’s hardworking entrepreneurs deserve a government that respects their constitutional right to earn an honest living. It’s time for courts to step up. It’s time for courts to enforce the Constitution’s protections for economic freedom and put a stop to the Missouri mover monopoly.