Thursday, April 09, 2009

The war on home-based businesses

In the entry Home Business Opportunities, various endeavors one could invest in with low startup costs were investigated, endeavors that could operate out of the home. These could function as home based businesses as well as sidelines to primary employment.

Many potential businesses are already forbidden to entrants without extensive resources due to prohibitive licensing requirements, a subject much examined by the Institute for Justice as they try to remedy the various laws that prohibit people from working their way out of poverty.

But it is impossible to license every single field. It is impossible to prohibit home businesses. While certain fields can be forbidden or strictly regulated, the realm of human endeavor is too broad for piece-meal laws to restrict.

In order to inhibit home based businesses it is necessary for there to be very broad laws to catch any endeavor not already covered by existing licensure laws.

Two such bills have recently been in the congress. One has been signed into law and one is in committee.

The Consumer Product Safety Improvement Act is one of those laws.

Anyone who makes any home crafts, from furniture to clothing, has to spend exorbitant sums of money to test the product and ensure that the amount of lead in it is safely under the legal limit, even if there was no lead involved at any stage of manufacture. Buying yarn, knitting a scarf, and selling that scarf is now restricted unless the scarf is tested – even though the yarn has theoretically been tested.

An exception to that rule is that it may be theoretically possible to say that the product is not primarily intended for children, requiring extensive market research to determine if that is the case, extensive market research that (like the testing) is something large corporations can afford but home based enterprises cannot.

The other is the Food Safety Modernization Act which will do for the family farm what the CPSIA did to the family firm.

It is officially target at organic farms, requiring them to use commercial fertilizers and pesticides that organic farmers currently do not use. But that is not the full scope of the law. Anyone who sells any excess produce (as family farms often do) are subject to this law as those family farms are now commercial farms. This bill also includes standard for feed of livestock

Also this creates a Food Safety Administration within the Department of Health and Human Services that tracks the DNA of food products, which would be of great benefit to the primary lobbyist in favor of the bill, Monsanto. Given how bees are spreading genetically modified crop pollen to organic farms and family farms, Monsanto feels entitled to payment whenever a farmer has contaminated seed.

While there is nothing inherently wrong with genetically modified crops, billing innocent farmers is a dirty tactic. Pushing a bill through congress to make it easier is even dirtier. That this will ultimately undermine the family farm when excess produce is produced is a terrible idea in the middle of a recession or at the beginning of a depression.

Two very broad sweeping bills, they essentially cover any product you can sell that is edible (FSMA) or inedible (CPISA). A home based business either sells products or services, and these bills restrict products. Since most services are either licensed or are illegal, these bills finish the destruction of the home business.

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