This story, written by Seth Slabaugh, for the Muncie Star Press entitled Barbers, cosmetologists opposing deregulation is a good illustration of why once the legislature licenses an occupation, the process is unlikely ever to be reversed.
Rep. Wolkins, the person who describes himself as the “small-government” person, is pretty openly throwing his arms up and isn’t going to push for his HB 1006 which would deregulate barbers, cosmetologists, hearing aid dealers, and security guards. The act of licensure creates a self-preserving constituency, and the counter-interest in the general public is much more diffuse. So, when the deregulation bill comes up; you have a very motivated group fighting. The general public who might experience lower costs (perhaps significant in the aggregate but not to any given individual) and potential practitioners who might enter into the occupation if the barriers were reduced are spread out and have an interest that is more abstract.
I expect Rep. Wolkins is getting lobbyist bending his ear, creating the specter of streets filled with madmen posing as professionals, splashing caustic chemicals all about and plying the population with disease. That’s sort of been the tone on my previous blog post. Though, as one commenter from Great Britain noted, they seem to be working through the horrors without a similar licensure scheme.
Don’t get me wrong. I’m one of the members of the general public with nothing but an abstract interest in the case. I have little hair and get it cut at home by my wife with a set of clippers. I’m not even sure it’s good policy to de-regulate these professions. But, the dynamics of the response leave me convinced that good policy has little to do with the outcome. The outcome is determined because those with a vested interest are organized and those with a more indirect interest are not. The people who sell the requisite educational credit hours and the people who benefit from restricted competition will line up to persuade the legislator; and the legislator will gain little to nothing but grief by opposing them in favor of those who are disorganized. That’s not just an issue in licensure situations, by the way.
“…good policy has little to do with the outcome. The outcome is determined because those with a vested interest are organized and those with a more indirect interest are not.”
And here it is. American politics summarized in 30 words. If it could fit into a tweet, Doug would be the 21st-century de Tocqueville.
So Doug, you have very accurately described the public choice theory aspect of licensure. Bravo.
Now it is just a short intellectual step towards accepting that ALL governmental regulation works the same way. Folks who have a lot to lose (those being regulated) naturally capture the regulatory process for their own purposes, many times to do nothing more than stifle competition.
Most automotive regulation is like that.
Good analogy. The article at Star Press gives alternatives to regulating themselves but the arguments against it, [listed in the article] while seemingly warranted, read like Armageddon if deregulation materializes. Competition in the private sector, lowers prices and promotes excellence. Advertise you have trained professionals and beat the competition who doesn’t.
Certification often seems like a better way to go. Let anyone do the activity; but specify criteria people must satisfy before holding themselves out as “certified.”
The fact that current license holders might be self-interested should have no bearing on the merits of licensure itself.
And I think that there is a lot of merit to licensure. The naive idea – so often pushed by economically illiterate libertarians who wouldn’t know a transaction cost if it bit them in the [insert appropriate bit of anatomy] – that if you disclose everything, the market will sort it out, just doesn’t work in the real world. It doesn’t work because of transaction costs – a typical consumer wanting to receive a haircut or have an electrician add an outlet – just won’t notice the presence or absence of some sort of certification behind a title. It’s likely that they won’t even know that there is such a thing as a certified cosmetologist (or whatever).
That’s why licensure is economically efficient – everyone offering the service is, by definition, qualified. It is very friendly for the consumer. And of course it provides a convenient method of removing a bad actor.
Now, there are a few caveats, of course. The first is that there needs to be some reason for licensure in the first place. Cosmetologists put caustic chemicals on people’s heads, need to avoid transmitting diseases between customers, and have special protocols to follow if they find lice. (And this is just off the top of my head). Security guards hold people against their will and may carry guns. Plumbers can flood your house. I think that all of these are good reasons for a licensure scheme.
Secondly, the prerequisites for licensure need to be no more extensive than is necessary for competent and safe exercise of the occupation. IMO, continuing ed requirements usually fail this test, for several reasons. The main reason being that requiring a certain number of hours per year does *nothing* to make sure that you learn what you might need to learn; the other reason is that the hours requirements are usually much too long for what you need to learn. As a lawyer, I would learn more from spending 2-4 hours reading written materials talking about new statutes, new supreme court decisions, etc., than I do going to 12 hours of random ICLEF lectures.
But I digress.
I will say, WRT certification vs. licensure, it is true that there is a difference between people who deal with the general public as consumers and people who deal with businesses. A business is more likely to do due diligence, and thus for a person who hires themselves out solely to businesses, there might be a better argument for certification vs. licensure. Security guards would be a good example, perhaps – while I do think that they need education and training, I also don’t think that, say, Circle Centre Mall would hire someone without appropriate training, due to liability issues if nothing else.
But, as a consumer, I like licensing schemes. I don’t want to have to carefully scrutinize the qualifications of my service providers. I just want to know that they’ve met whatever minimum requirements there may be, without resorting to an internet search.
Peter, like most liberals, you have come up with a very elaborate model of how life really works. But is your model accurate?
How do you respond to folks who note other advanced western countries who do not have licensure, but who do not have the problems that you assert would arise without licensure?
“Peter, like most liberals, you have come up with a very elaborate model of how life really works. But is your model accurate?”
Nice try at an ad hominem – I suppose you just can’t help yourself.
But I can’t really answer your question until you point out those advanced western countries without licensure. Because the ones I’ve lived in had licensure out the wazoo ™.
Check this thread, or the previous one. Someone brought up that England has no licensure of cosmetologists, with little ill becoming of it.
Most other countries don’t let the doctors’ professional organization (AMA in our case) regulate how many doctors graduate every year. That may be why most “advanced western countries” have far more doctors per capita than we do in the US, and their salaries are far lower.