Saturday, 17 June 2017

A License to Mow Lawns? Occupational Licensure and Liberty

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If teenagers in Gardendale, Alabama, want to earn money this summer mowing lawns, they’ll need to comply with a city ordinance requiring them to get a lawn mowing license, permission that will cost $110.

Learn Liberty reports on its blog how the city government came to require a business license before mowing a lawn:

Young Alainna Paris was mowing her neighbors’ lawns for $20–$40 each. Now, many teens earn extra money mowing lawns, and yet there don’t seem to be a lot of law-enforcement resources dedicated to licensure enforcement.

So how did Alainna’s illegal lawnmowing come to the attention of the authorities? Someone with a lawn company, upset by the prospect of competition, filed a complaint. 

Occupational licensure is an egregious denial of basic liberty and an all too common example of crony capitalism and the monopolies they establish.

Consider this comical example of the ridiculousness of these regulations as published by the Foundation for Economic Education:

[Sherry] Japhet is a veteran in the makeup industry and, according to Idaho laws and regulations, something of a criminal. Because she doesn’t hold a cosmetology licenses, Japhet breaks the law each time she applies makeup to Idaho politicians, TV personalities, and corporate leaders.

Plus, she usually does her work on-site, not in a licensed, state-inspected salon or shop. That, too, is against Idaho law.

That’s why Japhet found true irony in a call she received last week. The caller sought her mobile makeup services for Idaho First Lady Lori Otter.

Yeeeah… No.

The first lady’s husband, three-term Gov. Butch Otter, vetoed cosmetology reform legislation this year that would have exempted makeup artists like Japhet from state regulations. Had Otter signed the legislation, Japhet would have been able — legally — to provide her services to the governor’s wife.

"I was more than happy to remind them of what just recently happened.”

The sensible reform bill that Otter vetoed would have also lowered training hours required for cosmetologists to secure the state license. And, the bill would have provided a legal grace period for cosmetology schools that missed license application deadlines.

In his veto statement, Otter pointed to the grace period as the reason he rejected the bill.

How did we come to a place where the powers that be can demand people apply for permission to earn a living? Is occupational licensure not a contemporary cousin to the Stamp Act that sparked a revolution?

In a 1975 article reviewing Milton Friedman’s demolition of the practice of prohibiting work without permission of the government, Melvin D. Berger wrote:

Pressures are created to produce licensing that effectively protects the producer groups from competition and makes entry to the field more difficult for persons who might otherwise challenge the practices and pricing arrangements of the current practitioners. Friedman says that licensure almost inevitably becomes a tool in the hands of a special producer group to obtain a monopoly position at the expense of the rest of the public. There is no way to avoid this result. One can devise one or another set of procedural controls designed to avert this outcome, but none is likely to overcome the problem that arises out of the greater concentration of producer than of consumer interest. The people who are most concerned with any such arrangement, who will press most for its enforcement and be most concerned with its administration, will be the people in the particular occupation or trade involved … Once licensure is attained, the people who might develop an interest in undermining the regulations are kept from exerting their influence. They don’t get a license, must therefore go into other occupations, and will lose interest. The result is invariably control over entry by members of the occupation itself and hence the establishment of a monopoly position.

In other words, once the authorities mandate official approbation of this or that line of work, those who comply with such strictures demand the licensing regulations be perpetuated so as to drive up the cost they can charge for their services. Members of the public will perceive the possession of a government-issued license as some sort of sign of superior quality of service, thus preventing unlicensed practitioners from making a living, until such time as they decide to play ball and petition the powerbrokers for permission to earn a living.

Peering into the committee meetings and city council deliberations that result in these licensure regulations, Adam Smith famously wrote, “People of the same trade seldom meet together even for merriment and diversion, but the conversation ends in a conspiracy against the public or some contrivance to raise prices.”

Supporters of the scheme, however, insist that if the government didn’t stand as sentinel, protecting the public from poorly performing providers of this or that service, the people would suffer unspeakable harm. Barger has an answer to such a silly assertion:

The customer himself should be the supreme judge of who is competent to perform the services he requires. If the members of a trade or profession believe that certain standards or practices are considered desirable in their field, they ought to have a right to publicize this fact and even to urge customers to accept such standards and practices before making service commitments. But it is wrong to use the police power of the state to make the views of a producer group binding upon all people within the occupation and upon all customers. There is, in every field, a great deal of personal opinion about what is necessary for good service and what constitutes acceptable practice.

Ultimately, requiring a license to do anything converts an act that was once a right into a privilege, a privilege to be granted and revoked by rulers according to their whim. 

Occupational licensure is an example of this transformation and it artificially inflates prices, prevents people from practicing the livelihood of their choice, and exchanges genuine capitalism for crony capitalism and all the corruption with which that institution is concomitant.

Photo: Thinkstock

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