By Dave Albin

I have written before about people interacting with city government/regulations, which have ranged from downright oppression1 to arbitrary rule making2. With the former, the absolute authority of local government, with a little mercy thrown in for good measure, can be observed; with the latter, the local government seems to exist simply to make random rules that permit trampling on private-property rights. Part of the reason I have done this is that praise of local3 or state4 government is as common as complaints5 against federal government power. Another reason is that I find no shortage of material.
The recent situation of Antonio Sosa is a good example. Mr. Sosa runs an auto parts store in Columbus Junction, IA, and applied for a liquor license, along with plans for his proposed expansion of either a new store, or one to replace his current store in the downtown area - the first news article6 about his ordeal is relatively short, but I believe, very telling.

For starters, he had to apply for a license to sell alcohol. The recent article7 by Jeffrey Tucker went over the peculiarities of alcohol regulation in the USA, so no need to repeat them here. However, this is just another situation where local government holds absolute authority over what private business, on private property, can stock and attempt to sell. After all, if setting up a lemonade stand, the classic entrepreneurial activity for children, is threatening enough to local government to regulate8 it, then nothing is off limits. The fact that Mr. Sosa believes that people may want to voluntarily purchase alcohol in his store, at an agreed upon price, has led him to take this calculated risk - and it is his risk alone. He could purchase cases of alcoholic beverages and stock his shelves, and if no one wants to purchase it, then it becomes his loss. The idea that a piece of paper from the city council has any relevance in this process would be downright silly - if it were not that a violation of the liquor ordinances would result in fines and confiscation of personal property.

With the liquor license application, Mr. Sosa sent along plans for his new "convenience store", which appeared to show restaurant and bar facilities. This was apparently too much for the City Council of Columbus Junction, as one council member demanded that he "come to the council and explain". Another council member stated, "we don't want a bunch of bars in town", apparently in agreement with his colleague's demand for an explanation.

The underlying problem here, of course, is that of restrictions on private-property use. The city council has taken it upon itself to decide what private property can and cannot be used for, apparently in the name of some sort of responsibility. Bars voluntarily serving alcoholic beverages to people who voluntarily agree to buy them are apparently irresponsible in the view of at least some city council members. Of course, the negative actions of drunks are what come to mind for many people, but once again, Jeffrey Tucker's article7 serves to point out the unintended consequences and absurdities associated with regulations against alcohol and establishments that serve it. A bar which does not attract customers will soon close. Even without bars, restaurants, and convenience stores, people will find and consume alcoholic beverages.

Similarly, Mr. Sosa and his relatively-small "convenience store" are attempting to compete with giants like Wal-Mart, who (at least in the big stores) sell alcoholic beverages, auto parts, and food all together. Good thing Wal-Mart didn't submit plans to the Columbus Junction, IA, City Council. A quick search on the Wal-Mart website indicates that residents of Columbus Junction can travel a mere 15 miles to the nearest Wal-Mart in Washington, IA, to do their shopping for auto parts, alcohol, etc. Mr. Sosa's store is already operating with this disadvantage, in addition to his lack of the teams of people employed by Wal-Mart who serve to overcome these very issues - zoning, local ordinances, and the other barriers to opening a business. Mr. Sosa is likely doing all of this on his own, or with limited resources. It is no wonder then that no fewer than 9 Wal-Mart stores operate within 38 miles of Columbus Junction, IA. People like Mr. Sosa are being drowned in regulatory oceans by the local city council, while Wal-Mart is able to sail on.

The rest of the story, however, is some good news for Mr. Sosa, and seems at first to dismantle some of the points I have just make above - Mr. Sosa (apparently at the next city council meeting) was granted a license to sell beer9 at his "convenience store" by the city council. There are those who would point to this and claim the wheels of local government turned, and the problem is solved.

However, upon closer examination, Mr. Sosa can only sell beer. While this may not seem like much of a distraction, the city council is still dictating what can and cannot be stocked and sold in his store on private property. The market for wine and bourbon may or may not allow the best return on investment, but the only certainty is that Mr. Sosa will not be able to find out.

In addition, it was important to the council that this was a "convenience store", and not a bar. Thus, the use of private property is still up to the council members, and not Mr. Sosa. This falls into the ridiculous concept of naming for regulatory purposes, which is not so bad until you consider that the city council makes the categories. If you can't squeeze the name of your enterprise, on your own property, into one of their categories, you're out of luck.

Finally, the voting and approval process for the liquor license is of interest. Three council members voted to approve the license, while 1 did not. The opposition vote was not because of disagreements with the use of license, but because "20 people had contacted him in opposition, so he voted against it." The reasons for opposition by the 20 people are probably diverse; however, what is interesting and scary is that, in small towns (Columbus Junction10 has about 1,900 people), it only takes a small number of people to alter the voting of city council members, who reside in the town, too, and directly interact with the voters on a regular basis. So, the same things that people boast about city government (such as local control) actually make concepts such as "tyranny of the minority11" a clear reality.

In conclusion, local or city governments are often praised and held aloft as models for how government should be. However, it is clear that the voluntary actions of individuals, and mutually-beneficial exchange between people, can be severely hampered or completely banned by city government - in ways that may be unique to them.

Dave Albin resides in Illinois. Send him mail12.

References
1 http://mises.org/daily/4232
2 http://mises.org/daily/4453
3 http://utahpolicy.com/blog_entry/individual/who-gets-it-done-local-gover...
4 http://www.thelibertyvoice.com/state-versus-federal
5 http://media.pinnaclep.com:8088/blog/?p=78
6 http://qctimes.com/news/local/article_f74f1ab6-7fb9-11df-bb6e-001cc4c002...
7 http://mises.org/daily/4559
8 http://www.business-opportunities.biz/2009/10/28/youngsters-no-longer-ne...
9 http://qctimes.com/news/local/article_c65cdd50-95a1-11df-bdbb-001cc4c032...
10 http://en.wikipedia.org/wiki/Columbus_Junction
11 http://en.wikipedia.org/wiki/Minoritarianism
12 david_m_albin@yahoo.com