Poor Entrepreneurs

Alfredo Santos is just trying to make an honest buck in the slums of Houston: He wants to drive a jitney. A jitney is a van service that generally runs in crime-ridden neighborhoods where taxis are too expensive and bus service is irregular. But Santos is facing a tough opponent: his own city government. Houston officials are using an anti-jitney ordinance, passed over half a century ago, to shut down Santos's small business. It's a striking example of the way government regulation can actually hurt the enterprising poor who are trying to pull themselves out of poverty. In Denver four black men want to start a taxi company in the city's poor neighborhoods. Colorado's Public Utilities Commission says no. The Commission hasn't allowed a new taxi company to start up in nearly 50 years. Both these cases are being pursued through the courts by the Washington-based Institute for Justice. Its goal is to crack open the doors for poor entrepreneurs whose efforts are being blocked by excessive government regulation. Consider the taxi industry. In theory, becoming the owner-operator of a taxi is one of the best entry-level occupations for the poor and the unskilled. All you need is a second-hand car, a meter, and a city map—an initial investment of maybe $5,000. In theory, at least. But in fact most cities require cab drivers to purchase a license, which costs an average of $50,000—far beyond the reach of many would-be entrepreneurs. The license fees in effect create a taxi monopoly, which results in unemployment for many would-be taxi owners and higher prices for customers. In New York City, some drivers have taken to working illegally. They simply install meters in their private cars, attach a light, paint a sign on the door, and declare themselves taxis. Gypsy cabs, they're called. And so long as they service only the slums, the city turns a blind eye. But when they grow bold and leave the ghettos, the city cracks down on them. How ironic that some of the biggest barriers faced by poor entrepreneurs are erected by the government itself. And not only ironic but also wrong. In his book Poverty and Prosperity, Cal Beisner argues that excessive regulation violates the eighth commandment: Thou shalt not steal. The eighth commandment protects property rights—people's right to use their own property for lawful ends. A person's energy and skill are part of his property: his "human capital," as economists say. Laws that restrict the lawful use of that property, Beisner says, are a violation of property rights. Conservatives are criticizing the new tax bill that was just passed in the Senate for eliminating all incentives to set up enterprise zones in inner cities. But you and I ought to remind our political leaders that economic growth doesn't depend on government programs. Real job creation springs from the entrepreneurial spirit—the urge to create and work—which is part of the image of God. Instead of passing new bills, we ought to be encouraging the spirit we see in the men and women who just want to drive their jitneys and their taxicabs. If only the government would give them the chance.  

06/30/93