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The Cartelization of the American Workforce

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Freedom to work is increasingly being taken hostage by government licensing boards. The American economy is degenerating into a guild system, as government doles out privileges to one group of self-proclaimed professionals after another. Government licensing restrictions prohibit millions of Americans from practicing the occupation of their choice.

Over eight hundred professions now require a government license to practice — from barbers to phrenologists to tattoo artists. An entire economy is becoming increasingly oriented towards whether people have pieces of paper signed by government officials.

Licensing laws are almost always engineered by professional associations who want to protect the public from competitors who might charge lower prices. While the public is suffering from an epidemic of violent crime, state governments are increasingly devoting their limited resources to protecting people against unlicensed interior designers.

The Texas legislature passed a law in 1991 requiring a person to have a combination of six years of education and experience in interior design as well as pass a two-day state exam to get a license as an interior designer. (The new law grandfathered most currently practicing designers, exempting those who had been practicing or teaching in the interior design field for six or more years.)

The Austin Business Journal reported: “The adoption of the bill is a victory for the Texas Association for Interior Design (TAID), which for the past seven years has been lobbying for regulations to license interior designers.” Lazin Mathews, vice president of the TAID, declared:

“I think it’s a very positive step for the public because they will now have a guideline (to locate) someone with a lot of education and experience versus someone who got into the business because somebody told them they had good taste.”

Interior design advice tends to be highly subjective, but Texas police are objective and will throw anyone in jail for up to one year who calls himself an interior designer without the state government’s permission. The police power is thus invoked to prevent people from formally advising their neighbors on what color of rug goes with which color of curtain. Several other states have also recently made interior design a licensed profession.

Dentists have perennially used licensing laws to drill consumers. Economist Lawrence Shepard of the University of California at Davis estimates that unjustified state government restrictions on dental licensing add between 12 and 15 percent to the cost of dental care. The Federal Trade Commission estimated that unjustified restrictions on dental service cost consumers $700 million a year.

Many state dental associations seem more devoted to wiring the law than to fixing teeth. In 1986, the Supreme Court condemned the Indiana Federation of Dentists for policies that amount to “nothing less than a frontal assault on the basic policy of the Sherman [Antitrust] Act.” The FTC brought suit against the California Dental Association in 1991 for prohibiting its members from advertising discount offers to senior citizens, free initial consultations, promises to refund money to dissatisfied customers, or claims that an office offers “gentle dental care,” thereby restricting price and quality competition among dentists. Two years earlier, the California Dental Association vigorously opposed a program to allow dental hygienists to provide tooth and gum care without being employed and directly supervised by dentists. Yet, one 1987 study concluded that “for the dental procedures studied, the quality of services provided by auxiliaries is equal to that provided by dentists.”

Foreign dentists are especially discriminated against by dental licensing regulations. In most states, it is far easier for a foreign doctor to get a license to perform bypasses on Americans’ hearts than for a foreign dentist to get a license to fill cavities in Americans’ teeth. The FTC concluded that the restrictive state laws — and the resulting higher prices of dental care — were a major reason why 20 million Americans have never visited a dentist.

In most states, citizens must pay lawyers to transact routine legal business that could easily be handled by legal secretaries or by the individuals themselves. Lawyer-journalist Doug Bandow observed:

“Lawyers have enormous influence in our increasingly litigious and regulated society. . . . For more than a century it has been illegal for anyone except a licensed attorney to “practice” law. It has always been lawyers, not consumers, who set professional entrance provisions, graded bar exams, and regulated treatment of clients.”

In Nashville, Tennessee, two paralegals set up the Tennessee Paralegal Help Center in 1991 to help people fill out and file routine legal matters such as uncontested divorces, simple bankruptcies, name changes, and wills. Paralegal Perry Belcher observed:

“We are basically just glorified typists. It takes an hour to prepare a no-frills, uncontested divorce. We charge less than $100 for that. That’s not the case with an attorney. They charge about $750 for that same hour’s worth of work. It’s ridiculous to charge $750 for something that’s not even handled by the attorney anyway; it’s handled by the attorney’s paralegals.”

Davidson County, Tennessee, District Attorney Torry Johnson announced that his office was investigating the center and observed: “We received a number of complaints from local attorneys in addition to the one from the Bar, but we haven’t received any complaints from clients.”

In California, paralegal Mershan Shaddy was sentenced to 49 days in jail for the unauthorized practice of law. The Los Angeles Times noted:

“There is no definition for the “unauthorized practice of law.” Paralegals charge that . . . terms are kept deliberately vague so that lawyers and judges can mold the law to fit a particular case.”

As soon as Shaddy was convicted, the San Diego city attorney’s office warned San Diego newspapers to “put a stop to [advertisements for] this unnecessary and highly irregular practice,” declaring, “Non-lawyer advertising of legal services is ‘criminal conduct’ because paralegals don’t have a law license.” Newspapers were warned that they “did not have a First Amendment right to publish ads for illegal commercial activity” and that they could face “substantial liability.”

Licensing restrictions are often draconian on occupations that have a dubious reputation. Lake County, Illinois, requires a $1,000 licensing fee from masseuses and also prohibited a masseuse or masseur from kneading a member of the opposite sex. The Duluth, Georgia, city council announced in 1993 that it would legalize opposite-sex massages but decreed that “doors to the massage area must remain unlocked, massages cannot be performed on anything other than a table, and affidavits affirming the good moral characters of the owner and masseur/masseuse must be provided to obtain a business license.”

The Nevada Supreme Court ruled in 1989 that it was an unconstitutional invasion of privacy for North Las Vegas to require windows in massage-parlor doors to allow government officials to easily look in and make sure that masseuses were not getting a grip in the wrong place. A controversy broke out in 1992 in Mt. Prospect, Illinois, after an undercover Cook County deputy sheriff alleged that a masseuse at the Sports Health Spa had massaged his genitals. The spa’s massage license was temporarily revoked; the spa owner insisted that the masseuse had only momentarily touched the officer in an illegal place while trying to remove massage oils. (At that time, Cook County had scores of unsolved murders — but the police bravely placed themselves at the mercy of masseuses anyhow.)

Licensing restrictions are routinely justified by appeals to the government’s duty to defend the public. But while state governments insist they must restrict entry to the medical profession, they also insist that people should not be allowed to know the records — the killed-and-maimed batting averages — of medical professionals. When the Public Citizen Health Research Group, a Washington activist organization, sought to compile a nationwide list of doctors who had been sanctioned by state medical boards, eighteen states refused to reveal the names of any doctors who had been disciplined. Andrew Stein, president of the New York City Council, noted a few years ago:

“A New Yorker can routinely pick up a newspaper to learn whether his choice of restaurant has been cited by the Health Department for dirty kitchens. The same New Yorker, however, has no access to the malpractice records of the doctors into whose hands he may have to place his life.

Though licensing boards routinely make it extremely difficult for people to enter a profession, they are paragons of tolerance once a person is government-approved. Even when state medical boards have proof that doctors have committed violent crimes, they routinely do not revoke the convicted felons’ medical licenses.

A Washington Post investigation revealed that the state of Maryland allowed over thirty-five doctors to retain their licenses despite criminal convictions for sex crimes, drug violations, theft, and fraud. One Baltimore physician “was convicted of raping a gynecological patient in his office but allowed by the commission to continue practicing medicine.”

The Maryland commission even allowed two dozen physicians that it explicitly ruled incompetent to continue practicing medicine. The New York Bureau of Professional Misconduct allowed a New Jersey anesthesiologist to continue practicing medicine in New York after he had been convicted by a jury in 1992 of raping a patient in New Jersey; the anesthesiologist returned the board’s favor by getting arrested in May 1993 for sexually abusing a female patient in New York.

After the controversy splashed across the New York papers, William Fagel, a spokesman for the State Health Department, explained that there were not sufficient grounds to suspend the doctor’s license: “You can’t go back to something that happened in ’91, and you need evidence, you need witnesses.” (The New York officials apparently required a much higher degree of proof than did the New Jersey jury.)

Teacher-licensing requirements shaft the American public and millions of would-be teachers. Most states require teachers to be graduates of education colleges — which is usually the equivalent of requiring a person to run a four-year mental gauntlet of dreary, often pointless courses. It takes little intellectual effort or ability to slosh through the average teachers college; education majors at universities routinely have the lowest SAT scores (except for physical-education majors).

While teachers are frequently derided for their faltering literacy (such as misspelled words on picket signs during teachers’ strikes), potentially good teachers are banned from teaching because they don’t have a college diploma in education. Rita Kramer, author of Ed School Follies: The Miseducation of America’s Teachers , concludes: “Everything [would-be teachers] need to know about how to teach could be learned by intelligent people in a single summer of well-planned instruction.”

Teacher-licensing restrictions create an artificial shortage of good teachers, resulting in higher salaries for less motivated and often less capable teachers. Emily Feistritzer of the National Center for Education Information observed:

“The bottom line is that education is a very closed system. One of the things that would improve education is if we could open up the teaching ranks to people who are not inbred.”

Licensing restrictions are one of the most pervasive and least recognized triumphs of paternalism in the average American’s everyday life. No matter how many hacks the boards unleash upon the public — or how often the boards resist punishing the incompetent — licensing boards have somehow maintained their sheen of respectability.

Almost every licensing barrier is erected on the doctrine of consumer incompetence and government omniscience. The Federal Trade Commission recognized this in a 1990 report on the effects of occupational licensing:

“To the extent that the disciplinary process is ineffective in weeding out incompetent professionals, licensing may provide consumers with an inaccurate signal of quality and a false sense of security.”

The FTC also noted: “The bulk of the studies that measure the impact of certain licensing restrictions on quality find little, if any, quality enhancement.”

There is no reason to presume that bureaucrats can judge the qualifications of many professionals better than consumers can. The American Journal of Law and Medicine recently recommended that, instead of state licensing boards, medical professionals be credentialed by private boards.

Early in the twentieth century, a worker’s right to choose his own profession was recognized as one of the hallmarks of American liberty. The Supreme Court ruled in 1907:

“The right to hold specific private employment and to follow a chosen profession free from unreasonable governmental interference comes within the “liberty” and “property” concepts of provisions of the Fifth Amendment to the Federal Constitution that no person shall be denied liberty or property without due process of law.”

We need to return to our forefathers’ understanding of the importance of freedom in daily life. Freedom of contract means freedom in everyday life — freedom to try to build one’s own life to the best of one’s ability. Restrictions on freedom of enterprise amount to a political expropriation of opportunity — a constant whittling away of a person’s opportunity in life.

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    James Bovard serves as policy advisor to The Future of Freedom Foundation. He has written for the New York Times, The Wall Street Journal, The Washington Post, New Republic, Reader's Digest, Playboy, American Spectator, Investors Business Daily, and many other publications. He is the author of a new e-book memoir, Public Policy Hooligan. His other books include: Attention Deficit Democracy (2006); The Bush Betrayal (2004); Terrorism and Tyranny (2003); Feeling Your Pain (2000); Freedom in Chains (1999); Shakedown (1995); Lost Rights (1994); The Fair Trade Fraud (1991); and The Farm Fiasco (1989). He was the 1995 co-recipient of the Thomas Szasz Award for Civil Liberties work, awarded by the Center for Independent Thought, and the recipient of the 1996 Freedom Fund Award from the Firearms Civil Rights Defense Fund of the National Rifle Association. His book Lost Rights received the Mencken Award as Book of the Year from the Free Press Association. His Terrorism and Tyranny won Laissez Faire Book's Lysander Spooner award for the Best Book on Liberty in 2003. Read his blog. Send him email.