The Declaration of Independence, which Americans will celebrate in a couple of weeks, points out that everyone is endowed with natural, God-given rights, including life, liberty, and the pursuit of happiness.
Life necessarily encompasses the right to sustain one’s life through labor. Liberty necessarily encompasses entering into mutually beneficial economic transactions with others. The pursuit of happiness necessarily encompasses the right to live your life any way you choose, so long as you don’t initiate force or fraud against others.
So, a question naturally arises: Why do people have to ask the government for permission to engage in any line of work? Given that economic liberty is a natural, God-given right, why does the government wield the authority to require people to secure state-issued licenses as a condition for entering into certain occupations, professions, and trades?
Let’s be clear: Permission and freedom are opposites. When one has to secure permission from the state to engage in a particular line of work, one certainly cannot be considered free. Freedom entails the exercise of natural, God-given rights — rights that necessarily pre-exist the state.
Moreover, let’s confront the obvious: Licensure laws are nothing more than a protection racket, one that violates the principles of economic liberty. Like the guilds of the Middle Ages, licensure is designed to protect the rich from the competition of people in the lower economic classes. That’s because it costs money to secure a license — lots of money — money that the rich can afford to pay but not the poor.
Consider, for example, hairdressing. Why shouldn’t anyone and everyone be free to offer his or her services as a hairdresser? Isn’t that what freedom is all about — the right to sustain one’s life through labor? Why shouldn’t anyone who wishes to be hairdresser be free to engage in hairdressing without having to ask official permission to do so? Why not let the consumer be the sovereign rather than the state?
It’s not like you just go down to the state’s license bureau and pay ten bucks for a license. If that were the case, then licensure wouldn’t be a protection racket for the rich. Instead, to get a license, a person has to go to some specialized school to get certified as an hairdresser before the state will issue him or her a license. That school might cost some $15,000, which a rich person can pay but not a poor person. Thus, licensure serves to lock poor people out of the job market for hairdressing.
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We also mustn’t forget the racial aspects of licensure. In many cases, licensure is nothing more than a modern-day Jim Crow measure. It’s a way to protect richer white people who can afford the thousands of dollars to get the license from the competition of poor blacks who cannot afford the thousands of dollars to get the licensure. But racial bigotry is all wrapped up into beautiful verbiage about keeping people safe from incompetent hairdressers through licensure.
Needless to say, this licensure protection racket keeps prices artificially higher for consumers. That’s because the government is limiting the supply of people in the licensed sector of the market. When the state limits the supply, the price goes up. With no licensure laws, the supply goes up and prices for consumers go down.
A good example of the licensure protection racket is the law profession. One is prohibited from practicing law without a license from the state. If a non-licensed person begins offering to help people with an uncontested divorce, the state bar association immediately goes into court and secures an injunction that shuts the operation down. That’s to protect the richer people who have been able to pay for college, law school, and bar-review exam courses from the competition of people who can’t afford those things.
Proponents of licensure for lawyers say that it ensures that lawyers are competent and ethical. Really? How is that working out for them? Does anyone really believe that the state only licenses competent and ethical lawyers?
The standard response of the licensure racketeers is, “You mean you would let anyone perform brain surgery? Yuk, yuk, yuk.” The libertarian Nobel Prize winning economist Milton Friedman decided to make the case against occupational licensure. But rather than making the case against licensing of hairdressers, shoe-shine people, florists, and the like, Friedman thought it best to make the case against licensure in the most difficult area — the medical profession. He figured that if people could grasp the concept there, they could easily grasp the concept everywhere else. Friedman’s essay is entitled “Medical Licensure.” Or see this short video by Friedman entitled “Who Benefits from Licensing?”
Wouldn’t it be great if one of these Fourth of Julys, the American people truly reflected on the principles in the Declaration of Independence and decided to apply them to our lives?