OK, it’s not really that much of a shocker. George Leef offers qualified praise in his latest Forbes column for the president’s stance on occupational licensing.
Free-market advocates have long argued that occupational licensure laws do a lot of damage but little or no good. The first strong challenge to such laws I can recall reading was in Milton Friedman’s 1962 classic Capitalism and Freedom. Not content to pick off the easy and obvious cases, he went after the hardest one, licensing of doctors, and argued that people would be better off without it.
Since then, many economists have made similar arguments against licensure, ranging from risible and obviously anti-competitive instances such as interior designers to professions like medicine and law where poor quality work can have serious consequences. In this recent article published by the Foundation for Economic Education, for example, Robert P. Murphy argued that market mechanisms such as competency certification are far superior to licensure.
Rarely have I come across interest in this issue from liberals, probably because they’re so habitually inclined to think that government regulation must improve upon market results that they don’t take critiques of licensure seriously. (One counter-example, however, is the fact that some left-leaning law professors are willing to stick their necks out and criticize the way state licensing of attorneys harms poorer people, a point I discussed here.)
So it was surprising to read that in President Obama’s proposed budget, there is a small (by federal government standards, anyway — $15 million) amount of money for a study of occupational licensing requirements in the fifty states. That idea got a favorable shout out on the leftist site Vox. Writer Timothy Lee observes that “many states have expanded licensing rules to professions where it does make much sense,” and links to a study by the resoundingly libertarian Institute for Justice showing that occupational licensing has grown like kudzu over a southern field in summer.
I would like to offer up one cheer for this initiative, which is, I think, unique in the entire history of the Obama administration. What else has it done that has not expanded the scope and power of government?
