Constant clash between innovators, regulators
The arrest of The Pump Bar’s manager for selling “infused” drinks demonstrates that anyone who wishes to introduce a new product, service or business model in today’s regulatory environment is embarking on a perilous journey with bureaucrats lurking at every turn, waiting to pounce on everything not already covered by existing regulations.
He follows in the footsteps of the proprietors of Nani, the innovative Oklahoma City dining venture struck down by the insidious idea of “best practices.” And let’s not forget the fate of H & 8th Night Market, whose opening night was shut down by armed health and alcohol agents.
Droves of vapers have used e-cigarettes to quit smoking, yet the Tobacco Settlement Endowment Trust continues to pursue a campaign to outlaw them in every city and town in Oklahoma. Uber’s Travis Kalanick is another of all-too-many innovators who have been forced to fight government regulators determined to criminalize everything new.
They join the ranks of historical figures such as Cornelius Vanderbilt, who defied a government monopoly by providing steamboat transportation to passengers delighted by his service and thrilled by his daring in evading officials who sought to arrest him for the crime of selling a better product.
The reason for the existence of regulation as such is now seemingly threatened by the phenomenon of information about product reliability and trustworthiness that overflows the internet thanks to feedback mechanisms built into “sharing economy” smartphone apps. Or is it? Is this just another challenge to be swept aside by the mantra of “the public good?”
No less than U.S. Supreme Court Justice Ruth Ginsburg has declared that overregulation of a market makes for less safety, not more. She was referring to the market for abortion services, but that doesn’t change the principle involved. An individual’s right to exist for his or her own sake is what gives a woman the right to her own body and what gives a business owner the right to run his business as he sees fit.
Innovators need to start standing up for themselves. They need to call the regulators’ bluffs and proclaim that a new idea cannot be automatically illegal just because it’s not mentioned in existing regulations.
These regulators complain that the free market is a lawless anarchy, a “wild west” where justice is nonexistent. But a truly free market is possible only with a government that protects justice by protecting individual rights. Such regulators deserve to be taken to court, as Airbnb has done in San Francisco with its legal challenge to that city’s licensing laws.
Entrepreneurs need to follow Airbnb’s lead and demand that judges and legislators codify into law the principle that a new idea cannot be illegal just because it is new and not covered by existing regulation. Nothing less than the continued existence of innovation as such is at stake.
Originally published on page 9A of The Oklahoman and at NewsOK.com, July 9, 2016.