Here is a little thought question to ponder concerning the roles and responsibilities of business. I put it here, because a lot of people seem to take a business as a natural given. That is just exists naturally like a tree or a rock. But it doesn't.

This is off-the-cuff, so it is probably flawed, but here goes...

It's a hot summer day, and I notice there are a lot of thirsty-looking people walking on the sidewalk in front on my house.

I spy a business opportunity. So I buy some lemons, sugar and water, and invest some time making pitchers of lemonade. I get a table, plastic cups, and head outside to set up shop.

Now, consider the picture before I set up shop. There is no lemonade. Anyone walking by my place, at least for the time they are by my place, cannot satisfy their thirst. Yet there is a natural demand for lemonade. So my little lemonade stand is meeting a natural demand.

I decide to charge fifty cents per cup. Person after person stops for a cup of my lemonade. This is a business, but understand the nature of the interaction. We are both winners. I win because the fifty cents covers my costs and efforts and makes me a profit. The consumer wins because they are exchanging, by choice, fifty cents for a cup of lemonade. They must, by definition, win, because the exchange is voluntary. They could just as easily pocket the fifty cents and keep walking.

Demand is good, so I raise my price to a dollar. Less people take the deal, but I making more profit, and the consumers are still winning because of the voluntary exchange.

I raise my price to five dollars. No one stops. Thirsty as people are, they would rather keep the five dollars and walk a few blocks and then slake their thirst someplace else for a cheaper price.

I lower my price to two dollars. This seems to be best spot for me, as I am just enough people to maximize my profit. I am rolling in money, but some people are irritated at the price, seeing too much profit in it.

While some are complaining, one enterprising person sets up a lemonade stand across the street, charging a dollar. All the people head across the street. Bye bye profits for me. He is still making a handsome profit, and now I have to either cut my prices to compete or go out of business.

You can take the story from here. I add more flavors of juice. My competitor adds food. A third guy opens a smoothie stand on the next corner. And so on. We are competing like hell, but who really wins? We all do, but the primary winner is the consumer. He has gone from a street with no lemonade at all to a street filled with an array of choices to meet his need even if he voluntarily wants to exchange his money from the goods on offer.

You will notice there is no government here. Certainly, a government will be needed to protect basic property rights. If I set my competitor's booth on fire, the government needs to step in. Or if I put Clorox in my lemonade, the government needs to step in. But policing and the settlement of torts are legit roles of government.

The government Rand Paul fears (and most Tea Partiers fear) is the one that steps in and complicates an otherwise straightforward transaction between people. I need a license before I can put up a stand. I need to take a 40 hour course on Lemonade Safety before I can get the license. The table must be set-up by union workers.

You throw enough complications and headaches like this into the mix, and I will never set up my stand in the first place. The consumers need will go unfulfilled, and rather than working and making a profit, I'll just be sitting in my kitchen, staring out the window.