Street vendors show the benefits of free markets

Afew years ago, during a job interview at a think tank, I was asked why I believed that free markets worked. I had read the usual thinkers, but none of them provided my answer.

The effectiveness of markets became clear to me over years of living in places full of street vendors. Their stock, whether books or tools or food, was responsive to changing customer tastes and current fads, because the low price of entry meant they could quickly change what they sold. There was something spontaneous and dynamic about it all, epitomizing unfettered human action and showing a way in which people without much capital could make a living.

In Los Angeles, such sidewalk vendors are commonplace, but for years their work has been technically illegal, owing to legislation designed to protect brickand-mortar shops that did not want to face competition. (This is not unlike the situation faced by food trucks in many places.) Even plans to legalize street vending have included some onerous restrictions, such as giving brickand-mortar shop owners the ability to appeal vendors’ permits.

A new statewide law changes that. It prohibits cities from overregulating vendors: There will be no more bans on vending in parks, other limits on vendors’ location must be justified by health or safety concerns, and brick-andmortar businesses will not be given a vote on where vendors operate. In LA, certain areas will be off limits to vendors, they must pick up trash and ensure that people can pass on the sidewalks. They must not set up too close to driveways, curbs, building entrances and other street features. They must have any business and health permits required.

This seems like a healthy balance, and it brings out of the shadows a sort of economic activity that was already widespread. The opportunity to vend on the books allows people to better their situations by taking advantage of the market. When commonplace, peaceful practices such as vending are banned, they open the door to arbitrary enforcement and empower bad actors to harass people by claiming a regulatory violation.

This is a win for economic freedom and removes an arbitrary barrier from people who want to contribute to the economy. Vending should not have been banned in the first place, but California and LA ought to be commended for correcting the problem.