19 January 2012

Ongoing war of thought

Recent debates have shown me that many liberal/progressives are utterly hostile to the idea that their well-meaning desire for regulations is backfiring in any way. They are usually in fact hostage to the special interests that use them as anti-market competitive practices, and regulations are often not in fact used to increase public good and safety in any appreciable way, but rather to increase profits, wages, or sales for existing firms at the expense of competitive firms by establishing significant barriers to entry. Usually in the form of legal spaghetti one must cut through to attain access.

For example, while there are professions which we might think require at least modest levels of competence overseen by a state board of some kind, there is plenty of low hanging fruit that is less obvious where the public could even be harmed. On the positive side of the ledger we have doctors. The argument here is not as strong as many perceive it to be; that unlicensed by the state medical doctors are an enormous risk and menace to the public. But largely this is because modern medicine is overrated and the public has developed an abiding faith that doctors have magical healing powers that they do not in fact possess. In other words, the gain of medical training is positive. It tends to minimize people from worrying about what they've diagnosed themselves with on Web MD and allows for technical expertise at many surgical procedures that may or may not improve lives. But on many issues of medical expertise, experts are divided, evidence is slim, medications are minimally effective, if it all, and expensive, and the medical sciences become more of a medical art. Where the impact is placebo and a good rapport with one's caregivers more than anything definitive that was provided in actual care. We have minimal power over most viral infections and many forms of cancer, if any, and all we can usually offer in tangible terms is the alleviation of human suffering while the body attempts to fight off such infections and mutations. It's hard to see what advanced special training is required to offer successful palliative care at this level, much less that a license would be required to apply it (parents with some medical knowledge could do just as well at keeping a sick child armed with drinking fluids and expectorants for a common cold for example).

So. To point out some problems here, one of the most practical issues facing the country economically is rampant use of state licensing. When nearly 30% of the overall workforce requires a form of certification from the state to work, chances are that most industries are rent-seeking and jacking up profits rather than providing a decent benefit to the public by screening out unfit and under-qualified workers, or entire firms, in their fields. I haven't gone through personally every field that is so licensed by the state at some level, but doctors to me are about the only field where a plausible argument of public harm even emerges and where there might be any evidence marshaled to defend it. I'm fairly certain that 30% of our work force is not doctors, or nurses, or even just works generally in the medical field (dentists for example). So what we're left with is the state licensing for people to shampoo or cut hair, to decorate homes, to start moving companies, and so on down the line. There might be arguments for industries to accord themselves with minimal competency tests in fields like accounting, teaching, or the aforementioned cutting hair, but all of these are fields also licensed by the state in some manner. Not a mere certification of competency to advertise one's acquired skills to potential clients or firms, but a state license is required.

Are there substantial public risks involved here? The complexity and onerous nature of the individual tax code already baffles even these competent accountants all too frequently. Still, for most people, a much more simple tax form is sufficient to file an accurate tax return with the IRS. They receive wages which are reported to the government by their employer, and their deductions are plain (have mortgage, have children, have spouse, etc). Do we need licensed CPAs for that? Most people can do it themselves had they the mathematical acumen or a simple computer programme. Where someone has the money and assets to have more complex returns, they're likely to require more knowledge. But they would be free to seek it out and are already at risk even from the supposedly competent. What of teachers? There seem legions of stories of woefully poor or unconcerned teachers in public schools. How did they get there if they were licensed by a state entity? How do they stay there?

What seems clear is that the licensing requirement is tied in with higher levels of education for many of these fields. Completing and attaining such levels of education should be sufficient claim to basic certification for potential employers in these fields than is a state required exam, or should that be insufficient, an industry standard exam could substitute just as easily. The argument for requiring state licensing however requires an argument that there are substantive harms to the general public caused by non-licensed competitors having easier access to the field. In most fields, such evidence of harm is scant or non-existent. Even for fields one would expect some harm to appear such as a difference between lower certified dental assistants and dentists, the evidence does not exist. In most fields in fact, the evidence is that the higher prices charged by state license holders is a greater harm to the public than is putatively prevented through these licensing boards (decreasing access to dental or health care is a bigger public harm than the possibility of malpractice events). Whatever well-meaning intentions are involved here, if there is no evidence of a market failure, and there appears to be evidence of a market capture of the regulation, we are probably better off letting these ships sail than fighting over them.
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