LICENSING IS A SCHEME TO STOP COMPETITION
Licensing is another scheme in the United States largely utilized by government and Big Corporate special interests to retain power and destroy competition. JAM Views members believe free-market competition is at the heart of capitalism and success for our nation. We believe steel sharpens steel, top teams welcome top challengers, and great minds tested achieve higher wisdom. Contrarily, licensing is a tool used to protect those in power and protect those at the top of the pyramid, which unfortunately makes everyone softer, less innovative, less cost efficient, and less educated.
Yet, these special interests always present licensing as a form of consumer protection, skill development, or a system to ensure individuals are "qualified." A Founding Father, or a rugged individualist, would find it absurd that we must have a government agency, or city council member, tell us which hair braider, local florist, eyebrow threader, or even financial advisor we may patronize. A step further, why do we allow these special interests to shut down their competition in payday lenders, for-profit colleges, and even generic drug distributors?
In our communities, city council members, government agency personnel, and union leaders are some of our least-educated and least-experienced business members, but we are brainwashed to believe we need them to make our decisions, filter our choices, and protect us from ourselves. How ridiculous is this?
To compound this artifice, we allow them to demand onerous fees for applications, permits, licensing, and continuing education, all which enter the coffers of the most-ineffective allocators of capital in our society. Why do we go along with this? Is it Freudian fear of authority indoctrinated in us as children, or is it Skinner behavioralism learned throughout our lives, which causes us to blindly let these people control our companies, our economies, our lives? Do we not have confidence in ourselves to select an appropriate eyebrow threader?
The Louisiana Agriculture Department requires large fees and 202 days of education and experience to obtain an occupational license in order to operate a florist. Governor Edwards, attempting to eliminate these barriers to competition, found that state records showed no history of anyone ever being harmed by a poorly arranged bouquet, yet the state senate shot down his efforts claiming, "There's a certain amount of regulation to make sure the public gets what they pay for."
A better outcome. The Institute for Justice, a libertarian nonprofit, brought a lawsuit against Louisiana's Board of Cosmetology to eliminate the requirement for eyebrow threaders to take 750 hours of courses and three exams, as well as pay up to $13,000 in fees. Having no defense and not wanting to spend the money to defend the suit, the Board reduced the requirements to one test and a $50 permit.
The New Jersey Board of Cosmetology and Hairstyling requires hair braiders to complete 1,200 hours of training at a cost up to $17,000 and enforces hefty fines on those who attempt to braid their neighbor's hair without the state's authorization (1984?). Governor Murphy defended these requirements by admitting "burdensome licensing requirements" disproportionately hurt "African-American women, immigrants from African and Caribbean countries, and others," but he concluded that reducing these rules would jeopardize consumer safety. Remember, those who claim to be working in the interests of the poor and the minorities are usually the ones manipulating and hurting this very demographic = JAM Views Truism.
The last few years, Detroit lost multiple opportunities to host the NCAA Basketball Final Four, NFL Drafts and the NBA All-Star Game, all due to a lack of large hotels. The City Council voted 6-2 to deny a hotel permit to Crowne Plaza for a new 28-story tower expansion, a $164 million investment with zero cost to the city, all because these hotel owners have resisted the UniteHere! Labor Union from organizing their employees. Even though the last employee vote was 80-15 against organizing, labor rep Janee Ayers said she could not support building a second hotel tower "until we get things done right in the first tower, 100% correct." Councilwoman Raquel Castaneda-Lopez claimed that she was disappointed the hotel hadn't done more to compromise with the union, and she must vote against the expansion. Who are the top campaign contributors to city council campaigns? Labor and education unions. Detroit missed out on 1,785 temporary construction jobs and 250 permanent jobs, not to mention tremendous revenue from the NFL, NBA, and NCAA.
Every week JAM Views attempts to help us at least think twice before accepting the news, the economic reports, and the politicians' explanations at face value. If we can train ourselves to understand that humans always operate in their own self-interests (thank you Adam Smith), and that we only find the truth when we follow the money, we will continue to improve our business decision making capabilities and live a more-congruent life. Moving forward, let's take back responsibility for our own decisions and discretion, and let's allow entrepreneurs access to free markets in order to better their station in life, which in turn will raise up so many others.
* Thank you to the WSJ, Forbes, Fortune for above statistics/data. "I must uneasy make, lest too light winning make the prize light." - Shakespeare, The Tempest