Licensing is Anti-Consumer

Whatever its stated purposes, in reality most professional licensing efforts are mostly aimed at using the power of government to limit new entrants, and thus new competitors, from a certain business:

In Alabama it is illegal to recommend shades of paint without a
license.  In Nevada it is illegal to move any large piece of furniture
for purposes of design without a license.  In fact, hundreds of people
have been prosecuted in Alabama and Nevada for practicing "interior
design" without a license.  Getting a license is no easy task,
typically requiring at least 4 years of education and 2 years of
apprenticeship. Why do we need licenses laws for interior designers?
According to the American Society of Interior Designers (ASID) because,

Every decision an interior designer makes in one way or another affects the health, safety, and welfare of the public.

This hardly passes the laugh test.  Moreover as Carpenter and Ross point out in an excellent article in Regulation from which I have drawn:

In
more than 30 years of advocating for regulation, the ASID and its ilk
have yet to identify a single documented incident resulting in harm to
anyone from the unlicensed practice of interior design...These laws
simply have nothing to do with protecting the public.

As always on this topic, I end with a quote from Milton Friedman on licensing:

The justification offered is always the same: to protect the consumer. However, the reason
is demonstrated by observing who lobbies at the state legislature for
the imposition or strengthening of licensure. The lobbyists are
invariably representatives of the occupation in question rather than of
the customers. True enough, plumbers presumably know better than anyone
else what their customers need to be protected against. However, it is
hard to regard altruistic concern for their customers as the primary
motive behind their determined efforts to get legal power to decide who
may be a plumber.

Update:  This is timely, as 1-800-CONTACTS has informed me that due to various state and federal laws, they may not sell me the contact lenses any more that I have been purchasing from them for a year.  I must go into an office and pay a government-licensed eye doctor to get an updated prescription.  This is despite the fact that, once sized, contact lens strengths are easy to understand.  Every year or so my eyes go up by about 0.5.  I could easily get by still with my old contacts, or I could, if I wanted, self-medicate by adding 0.5 (the minimum step at my level of vision) to each eye and testing to see if this new setting was any better.  This is exactly how people buy reading glasses (or pants, or shoes), by simple trial and error in the store.  But I can't do this with my contact lenses -- or actually I do exactly this, but can only do it in a doctor's office, paying the government mandated annual toll to get my prescription updated.

Yes, I know, there are all kinds of fabulous reasons to go to the eye doctor each year, to test for glaucoma and other stuff.  But why shouldn't that be my choice?  The government doesn't force people with good vision to go to the eye doctor for such tests each year, only those of us with bad vision.  The only analogy I can come up with would be having to go to your physician each year to get your shoe size validated before you could buy shoes for the coming year.  After all, I am sure there are substantial health and safety issues with wearing poorly-fitted shoes.

  • Frederick Davies

    "After all, I am sure there are substantial health and safety issues with wearing poorly-fitted shoes."

    Don't give them ideas!

  • morganovich

    it has long seemed to me that the better path would be credentialing as opposed to licensing. if a government or an industry wants to provide a credential (US approved doctor or member of the US plumbing guild or whatever) i see this as a perfectly good idea. the government or industry group can set its own standards for joining, publish them, and let practitioners and customers decide if they care. it might well make me more comfortable to know that a plumber was guild bonded etc so that if he makes a mistake and floods my house, i know i am covered. saving me the time and energy to check him out might be worth a bit of extra expense to me. but if it were really expensive, i'd make my own choice about coverage.

    the real killer with the licensing system is how many people it keeps out. imagaine how many more interior designers there would be and how much pricing would drop if all it took was convincing clients you have good taste. i can certainly see why an existing interior designer likes the rules (though most of the ones initially licensed in NV were grandfathered in and never do no fulfill the requirements that newbies are subjected to), but there is no question it's anti consumer.

    if you want to protect consumers, you develop a "good housekeeping seal of approval" not a requirement that all products meet your standard.

  • Esox Lucius

    Uggh. The eye exam thing pisses me off. Last time I decided to change doctors to find one close to me and the new guy almost (serious as a heart attack) fondled me and I am a 37 year old man. Then after he told me it was only going to cost 75$ he calls me back to fondle me again only to charge me another 75$ to tell me nothing is wrong and I can *now* buy my contacts from 1 800 contacts.

    I learned my lesson though. You can go to Walmart and get your eyes examined for $35 dollars. It's still a hassle but I love the fact that those protectionists that were trying to make you spend $75+ for no reason every year are flipping out because of Walmart.

  • CRC

    "if you want to protect consumers, you develop a "good housekeeping seal of approval" not a requirement that all products meet your standard."

    This is exactly right. And why shouldn't we assume that such "good housekeeping seal of approval" certifications wouldn't naturally emerge in the marketplace as people seek information, validation and assurance from trusted, objective, independent sources.

  • BAM

    An analogy in my line of business might be if a state legislated that a Last Will and Testament becomes void after one year, and so everybody has to go back to their lawyer annually to have a new one drawn up. Ridiculous.

    I replenish my contacts from online overseas sources rather than enabling the optometrist cartel.

  • CT_Yankee

    the ASID and its ilk have yet to identify a single documented incident resulting in harm to anyone from the unlicensed practice of interior design...

    During my occaisional periods of bachelorhood, I have practiced unlicensed interior design in my own residences. Typically, the next "manager" that moved in was appalled, and she would waste no time engaging in another round of unlicenced interior design, often at great expense to me. What's worse, in another year or two I would have to sell or give away all that "new" stuff to make another respectable bachelor pad. Think of the waste that could have been prevented if I could just say it is just as illegal to throw out my bean bag chair as it would be to tear off the tag!

  • http://mostlycajun.com/wordpress/ mostly cajun

    I agree with the article.

    A recent Louisiana legislative session passed a law requiring licensure of FLORISTS! You know, because we had so many people injured and killed from incompatible flower arrangements.

    MC

  • Yoshidad

    Warren notes a very old human tendency here.

    From archaeology class: When humans first invented cuneiform in the fertile crescent, it was tightly controlled by a group of scribes. They call this "guild literacy."

    When easier, more accessible kinds of writing came along -- the Hebrew alphabet is one -- the guilds made cuneiform just a little more difficult.

    It's only slightly gratifying that Hebrew, and the more accessible alphabets are the ones that survived, but it's interesting to note that media control and licensing are issues as old as humanity.

  • Solar Lad

    Holy cow !

    Congrats, Yoshi, on an informative, concise, and non-confrontational post.

  • Paul, Optometrist

    I happen to be a member of the Optometrist cartel. Great post. I generally agree with the concept that licencing restricts competition, but its not honest to suggest that all professions have equal risk for harm to the consumer, and there is no lack of competition in the eye business. To think that the main reason your optometrist requires an annual exam for contact lenses is just "a government mandated annual toll to get my prescription updated," is a little near sighted. Fitting shoes really isn't a fair comparison and comparing floral arranging or paint color-choosing to the eye is a little over the top.

    Let me share a true story from the patients I saw just yesterday. During one of those "routine" contact lens exams, I discovered my contact lens wearing patient had a herpetic infection in his cornea (a cold-sore). The herpes virus numbs corneal sensitivity enough that he was unaware of the problem. Scar tissue was beginning to form very close to the visual axis, threatening permanent vision impairment. Contact lenses increase the risk to his eye exponentially by increasing the physiological stresses to the cornea that enable herpetic virus activation. Timely discovery and proper medical treatment may save his vision.

    Its true, you as the consumer should have the choice to have professional oversight or not if you want. But don't ever buy the concept that contact lenses to eyes are like shoes to feet. The eye is a very delicate, intricate organ. While generally safe, contact lenses can cause a litany of complications, some of which can permanently ruin your vision. Perhaps each citizen should assume their own risk for these things, but the system requires fiduciary responsibility of its licensed professionals and holds them responsible if they cause harm. This fiduciary responsibility cuts even deeper by a tort system that rounds up everyone involved when a patient sues. For example, you go against my recommendation that you examine your eyes yearly to maintain your contact lens Rx, and you end up with a bad outcome after filling my Rx at 1-800 after it expired (which they are completely happy to do,) I get named in the lawsuit.

    There is a compelling case for public safety and having qualified oversight of your eyes for another reason. You may be sensitive to the quality of your vision, but many are not. I see patients daily who think their vision is "fine" who don't pass the legal requirements for driving. Because accident investigations don't include vision checks for the drivers (only surviving drivers could be tested anyway) its not even on the public radar as a cause. But I know who drives in my town with poor vision. In 1993, I myself was run over and nearly killed by a teen driver with poor vision (had a glasses restriction on his lisence but wasn't wearing them--he admitted he didn't see me). No one dug any deeper to see how vision contributed to the accident, but you can be sure they did blood testing for drugs and alcohol. Do you think a "government mandated annual toll to get (your) prescription updated" for driving is wrong too? You still have the choice not to drive, but should not be allowed to endanger the public by driving with self-proclaimed "good vision".

    I lean very heavily toward conservative/libertarian views, but your application of the licensure argument and its reasoned restriction of competition is oversimplified. The Optometry Cartel of which I am a member happens to be phenominally competitive. Its a great profession that attracts a high number of professionals. Believe it or not, there are MANY starving optometrists who work for less than cost--just like there are in every business. Incidentally, my Contact lens exam fee is 5 times the Walmart Price. My Contact lens patients happily pay it because they see the value of my care, even knowing how cheap it is at Walmart. And my price weeds out the penny pinchers who are loyal to one thing only--price.

  • Paul, Optometrist

    PS. You may be interested to get an insiders view of how competitive contact lens work has become with the advent of 1-800 and its resulting market changes. 20 years ago, Contact lens work was considered a specialty and many specialty clinics thrived. The competition then was focused on quality and results. Profits were built into the retail sale of lenses (our bad) instead of into the professional care and work it took to fit them. Those places ceased to exist as patients began to buy their lenses from outside sources. Not only did the lenses become exceptionally cheap (good for us consumers), but the fees to fit them were already cheap and undervalued. Concurrent with this change, the cost to provide the care rose substantially for many reasons, including the publics' demand for better technology.

    The result? Contact lenses are only profitable in a high volume context (ie. WallMart or 1800.) There is no longer room for low-volume, high touch care in contact lenses. My business model caters to the consumer who likes low volume, high touch care so my high fee reflects the actual cost of providing the care. Does it bother me that I don't see a million contact lens patients? My price did exactly what I wanted it to do--filter out the people out who want my intellectual property for free.

    The greatest lesson I have learned as an Entrepeneur: you can never pay less than its worth! And often the low price leader is charging an exorbitant mark-up that is far more than the product is worth.

    Great day gentlemen.

    A Utah Optometrist (proud member of the Cartel)