Rent-Seeking Snow Cone Stands Wage Fight to the Stain
We have in O’Fallon, Ill., a rare example where the government gets it right — at least, so far. Two snow cone firms are engaged in a rather stupid fight over who has a permit to operate a stand at a bowling alley. The Belleville News-Democrat has the story here. The city seems to have made some minor mistake by generating two permits for a stand where the competitors think there should be just one. Instead of allowing the market and competition to work, the competitors want the city to outlaw the other stand. The city is taking the correct response to the dispute:
“The city doesn’t want to have to get between them,” Zoning and Planning Department head Ted Shekell said. “Let the best snow cone win.”
It is nice to see a planning and zoning official who understands that their role, if there is to be one, should be limited. But I do love the story and the dispute. I’ll let my friend “D,” who sent it to me, sum up all the great stuff included in one small story:
The story has it all. Misuse of needless licensing to stifle competition, a b.s. argument about protecting jobs, and sno-cones.
I can fairly claim to be more knowledgeable about the machinations of the snow cone oligopoly than most bloggers. I hope, for the sake of capitalist enterprise in the Metro East, that they experience a record heat wave this summer and both stands have a blow-out year — provided they only serve authentic Rio Syrup in their cones.
The snow cone market is highly variable and dependent on both season and weather. The obvious goal is to keep fixed costs extremely low and then the variable costs sort of take care of themselves. Sort of the exact opposite of the utility business model. If it is 102 degrees in July, trust me that people will pay just about any price for a snow cone. Unless, of course, some jerk in city government gives permission for someone else to also operate a stand nearby. Just who does O’Fallon think it is, that it refuses to prevent someone from operating a competing business? If governments at every level started acting like this, the next thing you know we’d be responsible for our own health care. …
P.S.: Here’s a link to the movie reference in the title of this blog entry.
