Gunner posts this article about various people running businesses outside the nanny-state laws that bind traditional businesses.

Here’s an excerpt from the article that Gunner cites:

Ripe, in contrast, was conceived three years ago as a twice-a-month supper club for a select group of guests. Their first night, Mr. Hebbe and Ms. Pomeroy served 22 people in their living-room-turned-dining room. Within months they had an online mailing list in the thousands and a bustling catering business.

Ripe recently moved into a tiny licensed commercial kitchen in the back of a downtown office building and is now, Mr. Hebbe said, ”fairly legal.” Guests pay $20 (not including wine and dessert) to eat cassoulet or risotto served out of communal bowls.

After only two years of business, Mr. Hebbe says that Ripe is also profitable, which is more than most new restaurants can say. Mr. Hebbe attributes this to Ripe’s underground roots. After all, he did not have to make an initial investment in a building or lay out a bundle for licenses, or insurance, or marketing, or staff. Starting a restaurant from scratch, depending on ambition and location, can cost hundreds of thousands or even millions of dollars.

That, dear readers, is the problem. there you are, a hopeful and motivated little business-man wanna-be with the idea to turn mama’s recipes into a business, and you’re faced with a veritable maze of regulations administered by an army of bureaucrats who could not care less whether another business gets off the ground, and every one of them wants a fee.

You get building inspectors, plumbing inspectors, electrical inspectors, health inspectors, each collecting a fee to rubber-stamp your proposed business. If you’re trying to open a business in an older building, you’ll fork over thousands upon thousands of dollars to comply with every bureaucrat’s bright ideas like wheelchair accessiblity and lighting standards. It doesn’t take long before you figure out that they’d just as soon you find yourself a comfortable job on the welfare rolls or on the payroll of a big conglomerate.

So it’s no wonder that thousands of people go into business outside the system. I’ve seen a bunch of them in my time. You can hit the parking lots at lunchtime at some of the plants I work in, and you’ll find vendors selling plate lunches in those ubiquitous white styrofoam clamshells. For three or four bucks you get a decent home-cooked meal and a canned drink. Although it is likely that these meals are prepared in a kitchen that would pass inspection by a health code inspector, I have yet to suffer from eating one, and I haven’t heard of anyone else that has, either. I’d estimate that the lady who does this manages to sell two or three dozen meals a day like this, and out of that she has to buy the stuff to make tomorrow’s meals, so maybe she gets $100 a day. If she had to jump through bureaucratic hoops, she wouldn’t be in the business, and a lot of plant workers would go back to lukewarm baloney sandwiches.

I know of neighborhood operations that have no regular days of hours, where somebody is known for good babecue or good gumbo or good jambalaya. Whenever the cook gets an urge to ply his trade, word gets around, and customers show up to eat. He might do this two or three times a month, weather (and attitude) permitting. Would he get a license, and a kitchen with three separate sinks, and wheelchair access? Would he (or could he) fill out the paperwork to make sure that the city, parish (county, to you non-Louisiananians) and state got their fair share of his labors in the form of sales taxes dutifully collected and turned over to the government? Nope.

Much of this grey area business is conducted by part-timers. I used to be one of those hated kitchen-table gun dealers, a guy with a Federal Firearms License and a list of suppliers. I’d inquired about opening up a legitimate storefront, but when I got through reading the list of hoops, I ditched that idea. They didn’t want my little business to be a “good citizen”. They wanted licenses and inspections and fees and more licenses, so I basically went outside the system. The sales taxes weren’t collected. Or sent in. I didn’t pay the fees so some bureaucrat could stamp a form that I’d been “inspected.” I just did a few thousand dollars worth of business in my spare time. The money I made went towards buying guns for ME.

And so it goes. A mechanic plies his trade in his back yard or in his client’s driveway. The money he makes is tax-free. Right off the bat, he makes an extra 14% by not paying Social Security. He makes another 20% by not paying income tax. 35% is a decent pay raise. There are many more examples: carpenters, painters, photographers, lawn care workers, and many more. Sure, there’s a certain risk to using one of these grey area service providers, but millions of them do quite well and provide adequate service, often at lower (remember that 35%?) rates.

There is indeed a growing underground economy, and to a large extent, it is driven outside the system by a government that just doesn’t know how to let people work.