In my work as an engineering manager, I recently received a very nice letter from an instrumentation and electrical contractor that has several offices from Bakersfield, CA to Pascagoula, MS. Responding to an inquiry we had about mobilizing instrumentation and electrical craft workers to a site in the panhandle of Texas for a major revamp, he noted the following:
In September of 2004 the advent of Texas state licensing of electricians created new operating challenges in regard to trade licensing and license authentication. While this regulation was unwelcome administratively, it was not unfamiliar to [company]. As a contractor operating from Florida to California, [company] has experience maintaining and monitoring license requirements in regulated environments. We operate in multiple states requiring craft licensing and in multiple cities requiring craft licenses. The stated goals of most such regulation, safety and skills validation, are legitimate and desirable. The practical and political motivation for introducing such regulation, however, is typically fees (licensing tax collection) and trade protectionism (the establishment of technical barriers to the free migration of trade labor resources across state and municipal boundaries).
Never let it be said that businessmen don’t know what’s going on. I’d say about 80% see regulations for what they are: taxes and special-interest politicking.
On a related note, my estimator informs me that our project, because it will be employing non-unionized labor, will have 11.9% greater productivity compared to union labor, based on a very large database of completed petrochemical projects. It’s the little things that warm my heart.
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Assuming that licensing and regulations are meant to raise revenues and allow special interests to take control of industries (an argument which I happen to agree with), at what point would you consider licenses and regulations to be necessary?
For instance, the argument has been made that medical licenses are unnecessary in many instances; that nurses could administer non-emergency care with the same skill and efficiency that doctors do. After all, when you go see the doctor, the nurse does most of the work anyways and the doctor just signs off on it. It is assumed that people would not go to a nurse for brain surgery but would feel very comfortable going to a nurse for broken bone or ear infection.
Using this argument, at what point would you consider a license necessary? At what point does the concern for the idiot who makes bad choices override the concern for freedom of choice? I would argue that the regulations should only extend so far as enforcing contracts, honesty in advertised qualifications, and so on, not to specifying what kind of qualifications are necessary to practice in any specific field. It seems heartless, but I think a person needs to be responsible for the choices that they make. If they make dumb choices (like asking a person with no medical training to perform a complicated surgery), then it is their fault.
I realize that the issue is somewhat more complicated and that I may be over-simplifying it, but am I totally wrong on this?
Justin,
Separate the motive, safety and quality, from the structure of licensing and regulation done by the State. Is it not conceivable to have market based issuances and checks? What if your third party payer and its network of reinsurers had a list of safe vs. non-safe providers? What if this list was based on massive analysis from these specialists, your reps- but that you could still access alternative knowledge, like multiple, competing “Consumer Reports” type pubs specialized in your interest?
The history of the AMA seems riddled with regulatory capture. OK, it may not be as bad as the Federal Reserve, but similarities abound. Is the AMA protecting you or its members? Do the interventions by the state help all patients or just some at the expense of others?
In all, there is no substitute for the market.
The possibility would still exist for licensing by organizations other than the state. Such licensing would be voluntary, and there could be multiple, competing organizations with their own standards. People would choose whose standards meet their needs. If someone wanted to be a doctor without any license, they could. However, they would probably be at a disadvantage compared to one with a license from a highly respected organization.
The market already has means of establishing standards, e.g. Underwriter’s Laboratory.
Licensing is a form of protectionism for allopathic medicine, the AMA and the medical industry. It limits and prohibits alternate care and discourages self care. Statistics show that licensing does not do away with malpractice.
Check out the Flexner Report (http://en.wikipedia.org/wiki/Flexner_Report) for the usual suspects etc. Flexner was NOT a doctor but a Carnegie foundation hack who also delivered American education to the big foundations.
Another “blessing” inherited from the progressive era [error].
People should be free to choose even the weirdest of treatments if they so desire, it’s their life and their body after all.
IT certifications are another perfect example of self-regulation by the market. As a DBA, I’m not required by law to be Microsoft certified, but being so adds value for my employer, which in turn allows me to command a higher salary. It also results in greater client confidence in our services, so the benefits are numerous.
Of course, nobody suffers physical injury if a database doesn’t get backed up one night or if I screw up a server build. Most would agree, then, that a certification by a reputable body would add even greater value for the practitioners of those crafts that bring a higher risk of injury or loss. It is then up to the consumer to decide if he or she prefers to hire an uncertified provider at lower cost and thus higher risk, or if the increased peace of mind is worth the additional cost…just as my employer must decide whether or not my certification adds sufficient value to my services to justify my salary.
Justin Bowen,
I can only assume you’re new to the site. If so, welcome!
What “Reformed Republican” says isn’t altogether wrong, but his terminology is a bit off. There’s a big difference between certification and a license. A certification is nothing more than a statement of trust in someone’s competency. For example, I hereby grant you the Jaq Phule special certification to post comments in the mises.org blog comments.
Meaningless, true. But sometimes, as our Microsoft DBA above shows, you’ll find in industry agencies that grant licenses that other people, who have never met this DBA before, have some amount of trust in. Trust transfers and is far more mobile than in decades past.
All the power that a certification agency truly has is the ability to revoke the certificate in a manner of its own choosing. This is market action at work. If it fails to revoke certificates when the general market feels it should, market confidence in the agency will decline; similarly, capricious revokation of certificates will lead to secession and possibly formation of a new agency by disgruntled yet competent practicioners of whatever art is being certified.
A license is a stench of a different vegetable, however. A license grants *permission* to perform an action not *directly* related to the certificate itself. A certification just grants the right to claim you are certified.
For contractual reasons, a marriage certificate may be necessary, so that a spouse can claim damages in the event the relationship goes bad. A marriage *license* grants permission from the state to take the action to get married — implying that the state can deny such a plea, or possibly revoke it later at a capricious whim. We call “Droit de seigneur” a barbaric right, but it differs from a state-granted marriage license only in the severity of the details.
Permission implies the right to use force to deny permission to someone who does not have such permission. And here we have the crux of the pastry of your choice: the core tenet of libertarianism is “no one has the right to initiate the use of force against another.” The ability to unilaterally deny permission to do anything involving anything other than the denier’s property is in direct violation of this ideological cornerstone.
Here at mises, you’ll find a motley crew of libertarians, minarchists, outright anarchists, and other cranky contrarians. We’re all pretty varying in many of our opinions, but at the core … well, to your question, “at what point would you consider licenses and regulations to be necessary?”
Here’s my own, personal answer: NEVER! I doubt you’ll find too much disagreement around here.
Apparently for some, there will always be places for the Dr. Nick Rivieras and Dr. Zoidbergs of the world.
“Here’s my own, personal answer: NEVER!” – Jaq Phule.
Wow! I have used a similar argument that since there are regulations against crimes such as rape and murder, and yet rapes and murders still occur despite the illegality, there’s no point to in having such laws. Doubly so, when most violent occur between ‘friends’ and family whereas the crime between random strangers is in fact quite rare.
Similarly, is certification a symbol of accreditation rather than exclusion? If one guy is a qualified doctor does that stop other people from becoming doctors? If other people are too lazy or stupid to be a qualified medical practitioner, so what? ‘Dr.’ Ziodberg says it quite well, “I bet I’ve lost more patients than he’s ever treated!”.
Sigh, this is the problem with philosophically unprincipled individuals. In reality, there are no ‘laws’ against murder etc.; there is punishment in retaliation though, or deterrence etc. due to a rights violation; the criminal cannot coherently object without falling into contradiction. Most regulations/laws, on the other hand, are entirely different in nature – they exist solely to regulate behaviour, and have little to nothing to do with actual rights – in fact, most of the time, they violate them. It is interesting to note how banning abortion hasn’t stopped it, and has only resulted in a black market of sorts cropping up, and a shady one at that, given that most decent individuals are not willing to sell on such markets.
So much for government ‘protection’.
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