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Blue Model Devours Italian Innovation

Walter Russell Mead

The sharing economy has reached Italy’s kitchens, as popular new social dining platforms allow amateur chefs to share their culinary talents with paying customers in their own homes. As the Wall Street Journal notes, however, traditional restaurateurs are balking at the unregulated new competition:

“With basically no rules, home restaurants are competing unfairly with traditional eateries,” said Stefania Porcelli, who runs a traditional family restaurant in Rome’s Trastevere neighborhood.

According to Italian restaurant associations, home restaurants served about one million diners last year, three times as many as in 2014. Home-dining platforms say the business is still small, though they acknowledge it is soaring. Gnammo, the biggest platform in the country, counted 7,000 diners last year, up from 1,700 in 2014, and has 225,000 members. Many home restaurants also solicit patrons through Facebook pages or their own websites, according to restaurateurs. […]

In response to pressure from restaurants, Italy’s lower house of Parliament in January approved a bill limiting home restaurants to no more than 500 customers and €5,000 ($5,400) in revenues a year. But restaurateurs are urging the government to impose heavier rules, particularly in health and safety.

In other words, some creative Italians have found a way to beat their country’s job-destroying Euro woes—and the powers that be have immediately organized to crush it. This is a great example of how the Blue Beast chokes off innovation and competition, transferring resources to well-organized interests and squeezing out the little guy.

But this isn’t only the fault of the restaurants. They are right when they say that sclerotic bureaucracies, crushing regulations and unrealistic tax burdens have pushed them to the wall. The ultimate blame lies with the state: the biggest, baddest Blue Beast of them all.

When hard-pressed but talented Italian families start serving delicious meals to willing customers to help make ends meet, they should be celebrated as innovators, not punished with taxes, license requirements and fines. Unfortunately, entrenched interests in Italy are fighting the dining disruption with the same backwards, blue model thinking that has driven the resistance to Uber and Airbnb across the U.S. and Europe.

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