Friday, May 6, 2011

Underground Entrepreneurs in Los Angeles

To those bummed out by the recent report that CEOs nationwide find California the worst state for business, well, you should be bummed out by it, but we've found something to cheer you up. The LA Times has a wonderful story on entrepreneurs in Los Angeles who are making it the only way you can there: by ignoring and bypassing the city's daunting maze of licensing and regulations entirely.

These tacos taste like anarcho-capitalism. And cilantro.
According to the article, LA is full of informal businesses largely being operated out of people's homes: tacquerias, carwashes, hair and nail salons, tire stores, and even clothing stores. The article focuses on an East LA woman named Naty Aguilar, who buys boxes of goods such as shampoos, soaps, towels, and toys from a wholesale warehouse downtown, and then spends the day selling them on her front lawn. Nothing costs more than $5, and neighborhood women are often waiting at dawn to buy from her. Aguilar says she makes up to $200 each day she's open for business. She reports plenty of complaints from neighbors and warnings from the County Sheriff's deputies. "Many people bother us, asking why the yard is like this, or the police tell us we're not supposed to do this," Aguilar said. "But I don't steal, nor do I ask the government for help, nor for welfare. I try to make my own living, and the city doesn't understand that."

We couldn't have put it better ourselves: Los Angeles does not understand this. As far as the city is concerned, businesses like Aguilar's are nothing more than zoning and licensing violations. In other words, LA isn't getting its cut from their hard work. Fortunately, it's largely impossible for the city to enforce all the violations, so it relies on complaints about specific cases, and you know what they say about victimless crime. Since this is the LA Times, the article doesn't bother to explore the link between the high rates of unemployment and poverty in the County and the existence of what it calls "entrepreneurship by necessity". So we'll close with the question they should have asked: if one woman running a hair salon has to pay $10,000 for a cosmetology license from the city, and another woman across the street can charge lower prices cutting hair in her living room, then doesn't the fault lie with the bureaucracy imposing the license fee in the first place?


  1. JustinMay 6, 2011 10:50 PM
    The day the LA Times actually endorses self-reliance and freedom is the day I renew my subscription, gone now these 6 years.
  2. GSLMay 7, 2011 09:35 AM
    Well, the article was a pretty tepid endorsement of those things. Tepid enough that it might have been an editorial oversight to let it slip through.