Overcoming An Inconvenient Law
IJ client Bruce Ebnet is now free to move pianos and other household goods after working with the Institute for Justice Minnesota Chapter to break open the state’s moving cartel.
By Lee McGrath
Laws that are pro-business are not necessarily pro-free enterprise. Entrepreneurs like Bruce Ebnet of Kasson, Minn., have seen this firsthand.
For 30 years, Bruce filled a niche in the moving industry, focusing solely on pianos. Yet, despite his unblemished record of helping people safely and securely move their prized possessions, state regulations forced Bruce to operate in the shadows—or else face steep fines and risk having his business shut down.
Since the 1950s, Minnesota has artificially limited the number of in-state household goods movers. The scheme gives existing movers a veto in the form of a “public convenience and necessity test” that requires applicants for new permits to prove to a judge that existing movers are unable to meet all the demand in a specific market. Preventing entrepreneurs like Bruce from entering the market has nothing to do with anything that is either “convenient” or “necessary” for the public, but rather has everything to do with protecting the profits of a politically powerful special interest: intrastate household goods movers.
After 50 years, the impact of the law is clear: Minnesota consumers paid the highest rates in the nation for moves within the state—30 percent higher, in fact, than those who paid for similar moves in neighboring Wisconsin and Iowa. Further, countless entrepreneurs were denied the ability to work. Instead, they would have to pay $40,000 to buy a permit from an existing permit holder. Government-created scarcity always produces high price tags.
Thankfully for consumers and the free market, Bruce would have no part of such a system. Instead of buckling under the pressure to purchase a permit after another mover blocked his application in 2004, Bruce turned to the Institute for Justice Minnesota Chapter and began a three-year campaign to convince the legislature to do away with these government-imposed barriers to honest enterprise.
On May 23, 2008, Governor Pawlenty signed a new law that ends Minnesota’s use of the public convenience and necessity test and opens the market to Bruce and other entrepreneurs. The new law goes into effect on August 1 and will put to rest furniture movers’ veto over new entrants. And, it will finally allow Bruce to pursue his American Dream without worrying about the furniture police.
Lee McGrath is IJ Minnesota’s executive director.