Beth Kregor is the director of the Institute for Justice Clinic on Entrepreneurship at the University of Chicago Law School. She & the IJ Clinic have been organizing informational events and providing information and resources in order to help fight Chicago’s oppressive legislation. She gave this testimony at the 7/19/12 public hearing at Chicago city hall in regards to proposed amendments to the food truck legislation.
It was so compelling that, after she finished, she was asked by Chairman Mitts to send in her transcript. We asked her if we could share it with you as well.
Kregor mentioned that this is not 100% accurate as she ad-libbed a bit. We think it’s about 98% accurate
Chairman Mitts and members of the Committee,
Thank you for allowing all of us to testify today.
My name is Beth Kregor. I am the Director of the IJ Clinic on Entrepreneurship at the University of Chicago Law School. I advocate for the little businesses that built Chicago, especially those who are trying to start a new business with a small budget.
I study the effects of regulation on entrepreneurship. I study how the laws that specify exactly how businesses should operate can freeze the business world in time and make it very difficult for the creative, innovative entrepreneurs to break in. And yet, the statistics show that the creative entrepreneurs who do something different, who draw consumers to a new business model, are the very people who create the most jobs in our economy. If you want Chicagoans to create jobs, you have to let them start new businesses that shake things up a bit.
I understand the temptation you face to preserve the status quo. It’s easy to focus on the established, traditional businesses like restaurants and think of them as constituents who need your protection. But remember that the restaurants are asking you to protect their financial interests, and the food trucks are asking you for freedom. In this country, freedom trumps protectionism every time.
If you decide where the food trucks are allowed to operate, you deny food trucks the right to experiment, to move around and find out what locations work best for them, and you are making it impossible for them to build thriving businesses. If you squelch the food trucks to preserve the status quo, who knows what future you are denying Chicago? You may be cutting short the career of the next Rick Bayless. You may be shutting down the next Vosges Chocolates before it begins. It’s impossible to know.
It’s impossible to look into the future, but we can look into the past and learn from it. 115 years ago, your predecessors were faced with a situation kind of like yours. Back then, the department store was just emerging as a new business model, and the grocers and the general stores did not like the competition. So your predecessors passed a law saying department stores couldn’t sell products that were traditionally sold by grocers and general stores. We can imagine how the City Council of the time might have felt like it was serving its constituents, the businesses that had served Chicago so well for so long, the cornerstones of Chicago’s business community. But we know with hindsight that stunting the growth of department stores would have been a terrible thing for Chicago.
Thank goodness, the Illinois Supreme Court struck those laws down, because they had nothing to protecting the public. If the City Council had successfully restricted the department stores in Chicago from developing their new business model to its full potential, if the city had decided which businesses should sell which items to which customers, just think what we would have lost.
Chicago would not have been a major tourist destination for people from all over the Midwest who came to shop in the city’s unique department stores. Marshall Field would not have become who he was, nor John G. Shedd who took over for Marshall Field. Would we have a Field Museum or a Shedd Aquarium? The Sears stores would not have developed a new twist on the department store. Would have a Sears Tower? And perhaps most frightening for the foodies in the room, we would never have had the Frango Mint, if the Supreme Court did not strike down laws saying department stores could not sell food.
Please take this lesson to heart today. Do not restrict the potential of a new business model simply to preserve the status quo. If you do that today and prohibit food trucks from serving customers near restaurants, you could be stunting the growth of Chicago’s culinary reputation and tourist appeal. If you do it repeatedly, by writing laws that protect the established way of doing business and outlaw the newcomers, you will shut down the entrepreneurial spirit of this city and stunt the growth of Chicago’s economy. Please resist the temptation.