Posted on 05/01/2012 7:19:29 AM PDT by MichCapCon
There’s a reason organizations like the Mackinac Center describe themselves as “free market” rather than “pro-business.”
Too often, businesses — especially, but not exclusively Big Business — self-servingly try to use government to limit competition and keep prices high. For true defenders of the free enterprise system, the benchmark of good policy is what benefits consumers, not what serves the narrow interests of a particular firm or industry.
Michigan’s licensed barber shop colleges provide a case study of such a price-hiking “conspiracy against the public," to use the phrase coined by Adam Smith, the father of modern economics.*
Recently, a bill was introduced in the Michigan House to repeal the law making it illegal to earn a living as a barber unless one first obtains a state license that, among other things, requires taking a 2,000 hour “course of study” at a licensed barber college. The state Office of Regulator Reinvention suggested last week that 18 occupations should be deregulated.
The prohibition and mandate is a good deal for Michigan’s five licensed barber colleges that are guaranteed a regular stream of customers. It’s also a good deal for incumbent barbers, because it dramatically reduces the chances of some plucky newcomer opening a shop down the street offering lower-priced haircuts.
Not surprisingly, the beneficiaries of the anti-consumer status quo are mad as heck and aren’t going to take it.
According to MIRS News, Michigan Barber School Director Darryl Green called it “the craziest thing I've ever heard of" and "total irresponsibility." He also trotted out the usual “public health and safety” scare tactics that are the common refrain of licensure protectionists, summoning the specter of AIDS and Hepatitis C should freedom reign and consumers be allowed to use their own judgment.
Here’s the specter that really scares the industry’s incumbents though: Repeal of the licensure mandate would mean more barbers, more competition and lower prices for consumers.
In Michigan and elsewhere, this same spectacle plays out all the time. Here are some recent examples provided by the Institute for Justice, a public-interest law firm that assists individuals victimized by licensure protectionism:
Eyebrow threading is a booming business in Texas. But state bureaucrats and business interests force threaders to take 1,500 hours of instruction at beauty schools that don’t even teach the practice.
Interior designers in Florida are forced to get a degree, pass a licensing exam and complete a four-year apprenticeship before they can earn a living on their own. A well-funded industry group fights to restrict competition by keeping these regulations in place.
Hair braiders in Utah must obtain 2,000 hours of cosmetology training.
Independent limo services in Nashville, Tenn., offering an affordable alternative to taxicabs were hobbled by a series of anti-competitive regulations forcing higher prices.
Tour guides giving Segway trips around Washington, D.C., must obtain a license for people who merely communicate for a living.
Funeral homes are forced by Minnesota to have embalming rooms — whether they use them or not. This benefits larger providers and harms consumers by prohibiting smaller competitors from outsourcing embalming and use the savings to charge less.
Barber licensure mandates are endemic, and result in perverse outcomes like the 80-year-old man in Oregon who has been cutting hair for 50 years but was forced to go back to school to keep his license.
No one has a stronger incentive to provide a clean shop and avoid harming customers than the owner of a barber shop, or any other consumer service provider. “The tragedy of a bad haircut” should be the punch line for a joke, not the rationale for laws that harm consumers and diminish opportunity.
There was an article recently about cab madallions, that license cabbies to work. The feet force the plate was half a ? Million dollars, and issued in limited numbers. This allowed people with connections to get the plates and then rape the driver with fees, and of course the customer with a lack of competition.
Crony “capitalism” at its finest.
Danger smart phone autocorrect. Feet - fee
Danger- dang. Phone flies through air and hits wall.
Actually, I have found "danger" to be quite appropriate in the context of SmartPhone autocorrect.
It ain’t just licensing and it ain’t just Michigan.
Licensing, inspections, academic qualifications, regulations, testing, etc, etc, ALL need to be scaled back, if not eliminated.
These are all excuses for a parasitic third party getting in the way of productive people trying to conduct business.
I am somewhat in support of this only if it means a better haircut. IF I am getting my hairs cut by a topless barberette, then I would prefer her to have undergone a proper screening process.....
I was talking with my husband about this the other day.
A barber ought to take a short course (10 hours, maybe?) on sanitation.
The barber must post the sanitation rules in the hair-cutting place, i.e. “Razors must be sterilized with (approved solution) between customers.”
And then the barbershop lives or dies depending how well the barber cuts hair. That’s it. Hair grows back.
Don’t know how to cut women’s hair or African hair or Caucasian hair? Tell your customers and let them take their chances.
Want to dye, straighten or perm? Chemicals would be another class. Maybe some FReepers with experience would know how long that ought to take - 20 hours books, 60 hours practical?
There’s plenty of people who have the skills to start a hair-cutting or styling and even chemical treatments in their kitchen without any classes, a neighborhood business - you know what your friends and neighbors are capable of, generally speaking.
My father had a clipper set, gave haircuts to the guys in his dorm, for a fifty cents. Imagine if he had to spend his first year at college studying hair-cutting, instead of physics.
These idiotic licenses are nothing more than state-enforced guilds. And the inevitable defense is the “public safety” argument. As if deregulating barbers is inviting Gotterdamerung.
The power to regulate is the power to destroy.
Along with getting rid of the government-registration barrier to entry into almost every industry, there needs to be a simultaneous shutdown of immigration to America.
What barbers, cabbies and every other industry would have to deal with if the registration barrier is lifted is a crushing onslaught of fly-by-night cheap operators setting up shop. Though they may eventually go bankrupt, the fly-by-nights can put a lot of good businesses out of business before they do.
While I don’t think the registration barrier is a good thing, I understand why industries like it; it’s simple self-preservation.
Politicians support immigration because they get campaign cash for it, as it provides cheap labor for big business, who then reward them with plentiful campaign funds. Until this dynamic can be changed, the immigration door will remain open.
If the “American dream” were not available to citizens of other nations, there would instantly be pressure - that would continually grow - for people in other countries to change their countries so they had their own opportunity within their own nation.
When a person immigrates to America, what has happened is they have given up on their own country being able to offer them safety or opportunity. When other nations “give up” on themselves, that means American policy of “nation-building” has spectacularly failed. If America was not there like a sugar-daddy to failed tryannical regimes, those regimes would not have an “enabler”. It would simply be the regime versus their own people. And the situation would naturally be pushed to come to a resolution. America should simply be advertising the principles that generate peace and prosperity - and trying to stick to those principles herself. American business would then enventually wind up with quality international trading partners instead of simply funneling U.S. taxpayer dollars through foreign - and often hostile - nations in order to generate export sales.
Another key industry in our economy with the artificial registration barrier issue is the securities industry, although the potential for new businesses if the barrier were dropped is certainly not limited to immigrants. The securities industry, of course, is a whole artificial framework at this point which causes the “general public’s” financial acumen - and interest in managing their own investments - to decrease instead of increase over time, but that’s a topic for another thread.
The bottom line is that all the machinations of politics in the Western nations today results in the average citizen being slowly squeezed by lower wages and higher prices. While politicians talk about taxing corporations or “the rich”, in truth, those financial entities pass on their costs, which eventually results in higher consumer prices and less local jobs. If the average Joe “class” owned and operated a higher percentage of businesses in their local area, they could source locally, which would create jobs locally and therefore a better local sales environment.
You got that right. ALL Licensing should be eliminated. Milton Friedman gave a talk where he provided brilliant arguments showing that even the licensing of medical doctors is anti-capitalist and bad for the consumer.
He discussed how market-mechanisms would evolve to provide higher quality doctors at much less cost. It was an interview that is priceless for it's genius.
It was an eye opening discussion for the fact that most people truly believe "doctors must be licensed." The simple fact is that government licensing precludes the evolution of market mechanisms that would most efficiently solve the "so called problems" for which government licensing exists.
If people knew just how evil most government is, 95% of it would be eliminated.
A lot of these licenses, certifications, and permits are little more than government shakedowns. Heaven help you if you get on the wrong side of the Health Inspector or the Barber Board. These unelected bureaucrats can deprive you of your ability to earn a living. Which begs the question (and points out a fundamental flaw in all government “solutions”): who protects us from our so-called protectors?
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