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Why Moms Love Capitalism (Even if they don’t realize it)

Nicolaes_Maes_-_The_Naughty_Drummer_Boy_-_WGA13816Whether they are employed at a full-time or part-time job or if they take care of their children full-time, moms often seek ways to earn supplemental income for their families. Moms are very active in the few, conspicuous forms of free-market capitalism still in existence: selling cosmetics, candles, and lingerie through at-home parties, holding garage sales, or selling items through online markets such as Ebay.

GARAGE_SALE_SIGN_ATTACHED_TO_A_TREE_OFF_MULHOLLAND_DRIVE_IN_THE_SANTA_MONICA_MOUNTAINS_DENOTES_RECENT_DEVELOPMENT..._-_NARA_-_557556.tifThese at-home methods of earning supplemental income require the mom-seller to offer a product to a customer at a price that will cover her costs and leave her with some profit. No license is required because if she is bad at selling, she simply won’t make money. There is no process that the mom-seller has to go through to have her items deemed “viable for sale.” If she sells bad items or misleads her customers, word-of-mouth will put her out of business in no time. And, she isn’t forced to charge a certain price. If she wants to put a $50 sticker on her son’s used pajamas, she is free to. But, unless her son is Justin Bieber, she will never sell them. So it benefits her to set the price reasonably. These are all hallmark qualities of the business-side of a free market. What about the consumer?

The customer views the item for sale and decides if the item is valuable enough for her to exchange the money required for the purchase (the selling price). Not only can she examine the item first-hand, or if the item is being sold online, she can look at pictures, previous customers’ reviews, and ratings. Either way, she can ask questions of the seller directly. Again, these are all hallmark qualities of a free market, but from the consumer side.

Dollar_sign_(reflective_metallic)Thus we have a win-win situation. Through at-home parties, garage sales, and online markets such as Ebay, customers can often get items that either they could never find at their local stores or they can find them at cheaper prices. On the flip-side, mom-sellers get to make a profit, determine their own schedules, do a job without a particular degree or work experience, work without government regulators breathing down their necks and costing them money, and they don’t have to pay an additional 35% to the federal government for having their own business. This is free-market capitalism.

But, if I were a betting woman, I would say that these havens of free-market capitalism won’t last long. Many local governments are already jumping on the profit-bandwagon by requiring permits for garage sales (1). Also, state governments are starting to implement sales taxes for online purchases (2). And if the a mom’s customers have to pay more for her items, she will either have to charge less or risk losing buyers. Either way, government interference in her formerly free-market will cost her some of her profits. So, moms, enjoy it while you can!

References

(1) http://biztaxlaw.about.com/od/typesofbusinesstaxes/a/Garage-Sale-Taxes-Licenses-Permits.htm

(2) http://online.wsj.com/article/SB10000872396390444097904577536971916035192.html

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