Michigan ranks sixth in the nation when it comes to
occupational licensing, with 116 different occupations requiring state approval, according to a recent Reason Foundation report.
Michigan even has a license for reptile catchers. You’d
think with only one native venomous snake, the Massasauga Rattlesnake — and a
relatively benign one at that — we might not need to rank so highly in this area
of policy. Apparently not.
So, why do we have all of these licenses? Who comes up
with them? Here’s a hypothetical example of how such policies come about:
A lawmaker meets with lobbyists representing an
association of interior designers. The lobbyists say interior designers
contribute $10 million annually to the state economy and provide more than
10,000 good paying jobs. Interior designers work hard to have a good reputation,
say the lobbyists, but all of that is in danger. Rogue designers who are not
members of the association have been undercutting prices and providing shoddy
workmanship that damages all designers’ reputations. The lobbyists tell of one
such designer who made a cheap shelving unit that collapsed, injuring the
To remedy this, the association proposes requiring all
interior designers to be registered with the state. They propose a course of
study (provided by the association, to members only) and a test administered by
a state panel of design experts (largely representatives of the association).
Applicants must pay a $500 fee to cover the cost of the course, the test, the
panel and all other related activities. Fee money would also be used to
investigate and prosecute any unlicensed designers — including levying a $500
fine for first time offenders and $1,000 for repeats.
The lawmaker likes the idea of "protecting" his
constituents and introduces a package of bills, mostly drafted by design
association lawyers. The legislation passes the Legislature and is signed by the
governor with little fanfare, as the association lines up members to testify in
favor of it and the media reprints their supportive statements on this "consumer
That’s the side of the story that is easy for everyone to
see. Here’s another side:
Jane Citizen works 40-plus hours per week to sustain her
family, and because of her interest in it, started her own interior design
business. She has no formal training in design, and neither time nor money to
pay for it. Her customers are happy, and her business has been steadily growing
by word-of-mouth. Jane has never been a member of any design associations and
doesn’t have time to attend conferences or read their publications, nor does she
have extra cash to pay their dues.
The new "consumer protection" act goes into effect
without Jane’s knowledge. She is soon approached on the job by a bureaucrat asking to see her
registration. He informs her that she is violating the law and must pay a $500
fine and cease plying her trade immediately. She must become registered or face
additional fines and/or legal action. Jane doesn’t have the extra $500, nor does
she have the time to take the state-required course or the money to pay for it.
She has unknowingly violated the law and must cease earning her living.
Lawmakers received short-lived but positive press for
"protecting consumers." But who was protected? Jane and those depending on her
income were not protected by the new law. Her happy customers who lost her
skills and competitive prices were not protected. The design association was the
only party protected. They eliminated competitors who drove down prices. They
protected their monopoly and damaged the marketplace.
Under such a law Jane and her willing customers are
"protected" from an honest and mutually satisfactory transaction. Free exchange
ceases to be a natural right protected by government; instead it becomes a
privilege bestowed by government. No longer can market competition ensure the
best services at the best price; instead a trade monopoly, using the force of
government, ensures the highest price for their service. No longer do free
people choose what constitutes a fair price, a fair wage and good design;
instead a government panel decides for them.
The next time you hear about "consumer protection"
legislation that requires yet more licensing, check to see who it really
protects. When government uses force to create and protect industry monopolies
for "public safety," it subverts our natural rights. That’s more dangerous than
a room full of collapsing shelves.
Isaac M. Morehouse is director of campus leadership
for the Mackinac Center for Public Policy, a research and educational institute
headquartered in Midland, Mich. Permission to reprint in whole or in part is
hereby granted, provided that the author and the Center are properly cited.